You make some great observations!
For starters, I must admit that I don’t know exactly how the entry process limits work on free hosting. iFastNet purposely hides such information, and there are only a few people in the world who are allowed to know exactly how these limits are calculated and what the exact parameters are. Everything I know is based on general knowledge and observation of the many accounts on free hosting.
Regarding the “This site / page has used all avaialble php / apache processes” error, I think you’re right. Judging by the text and the behavior of this page, it does sound very much like there is a hard process limit on accounts and this page is shown if this limit is hit.
As to what the exact value is, I don’t know. Within CloudLinux (the system which controls entry processes on cPanel), the value is configurable per account, so you could see different plans with different limits (as is the case with iFastNet’s premium vs. business hosting). With Hostinger, it appears to be 20. I don’t know what the limit is on our hosting. It could also be 20, but it could be more or less.
The knowledge base article about the entry process limit is about a different issue. That’s about the DAILY entry process limit. The system clearly describes this as a daily limit, not a maximum value.
As for how this “daily” usage is calculated, we can only speculate. It could be, as you appear to suspect, to be the highest value reached during that day. But the number of people reporting this error and reporting their account to be suspended don’t add up (this error is not seen so often), so I doubt that’s how the limit works.
I’ve been told that these limits are burstable. So, unlike with cPanel and Hostinger’s platform, your website shouldn’t immediately be shut down with the first wave of traffic. Instead, the system should allow your account to receive, say, an hour of heavy traffic and little to no traffic for the rest of the day without getting shut down.
In order to make that work, I would guess the system has some kind of continuous sampling to calculate something like an average over an extended period of time.
If you want, we can continue to speculate about what it could mean, but I don’t have that much information I can give you.
You said that the article was incorrect. However, I don’t fully understand yet which statement in the article you actually say is incorrect (or even which article you are talking about). If something is incorrect, I would like to fix it. And if something is unclear or confusing, I will need to clarify.