A loss limit prevents you from losing more than a set amount over a day, week or month depending on which period the limit is set for. A loss limit does not affect how much you can deposit or wager. The loss amount is calculated based on bets you place during the respective time period that are open or lost. If an open bet wins, the winnings amount is added on top of the current loss limit value.
Example: When you place a bet, the stake counts against your loss limit. If the bet loses, these losses are "locked in", but if the bet wins, the winnings are added back on top of the current loss limit amount. So if you have a 1000 EUR loss limit and place a 500 EUR bet at odds of 2.00, while that bet is open, your remaining loss limit is 500 EUR. If the bet wins, the 1000 EUR winnings are added on top of the 500 EUR that was left, so you would have 1500 EUR remaining on your loss limit.
What this means in practice is that if you are winning, the loss limit will not impact your ability to place bets. But your net losses cannot exceed the loss limit for the period that it is set for.