FreeTDS question about text size

General question for a FreeTDS guru:

We saw the warning in the freetds.conf file:

        # If you get out-of-memory errors, it may mean that your client
        # is trying to allocate a huge buffer for a TEXT field.
        # Try setting 'text size' to a more reasonable limit
        text size = 64512

We needed more but we still tried to be reasonable:

        #text size = 64512
        client charset = UTF-8
        text size = 200000

Of course we encountered a nvarchar(max) column that is holding way more than 200000 bytes and it seems to be getting truncated.

What is the impact of increasing text size to 10 MB?

Are any of these three scenarios true?

A.   Every column, even an nvarchar(8), is allocated 10 MB
B.   The memory utilization is only what the column actually holds...up to 10 MB
C.   The memory utilization is determined by table design: an nvarchar(8) col would be allocated 16 bytes, and an nvarchar(max) would be allocated 10 MB

Thanks,
Dave

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