How does the entity (neutral/hostile mobs) cap work on the server? What do you moderators/staff meant by the sign, "Excessive breeding will lead to your animals being removed without question or refund...", indicated below the villager that trades mob eggs? Do you remove entities server-wide or do you mods check each island's entity count and then remove them all if its excessive enough? If its the latter then how many mob entities exactly an island can hold, what is the limit? Please someone educate this poor peasant.
I think its just there as a friendly reminder to not over do it. I don't think there is currently a plugin that removes them, although the signs about chickens at the spawn hint to one, I've just never seen it in effect. I believe its more or less up to a mod if they feel you have an unecessary amount.
There's no hard limitation of entities but it's recommended not to exceed a number of 30 or so. And of course hostile mobs will despawn. And squids too.