Dunno... my reaction was for this sentence specifically:

  > Until this change, customers who have used fewer resources have covered the costs [...] for other customers who have used much more resources.
  

This does sound to me like "here, all 20TB is yours, but make sure you don't use more than 2TB, or else" - regardless from which angle I look at it.

or else they charge you $1 a tb, not cut you off

You're misreading. This wouldn't get the $1 fee. "We're giving you 20 TB (TWENTY) but don't you dare use more than 2 TB (TWO)"

It's a classic web host reseller technique of overselling and having it backfire.

That's only a problem if they cut you off. If there's a defined (low) fee for overages then I don't understand what the problem is. $1tb is very well priced. AWS/GCP charges from the first byte after the miniscule free tier.