The capping process is nothing new to big platforms like Twitter. A good example where capping is applied is Google. If many Google searches come from the same IP in a short period of time than you will be presented with a captcha instead of the actual search results. Having more strict limits on Twitter will create problems for all companies that have developed 3rd party applications.
Twitter will effectively limit the maximum number of users that a client application will be able to have.
Changes in API per end point rate:
The already existing limit of 350 calls per hour will be changed to 60 calls per hour. Some exceptions will be applied (user look-ups, fetching of profilesm twitter search) and the limit can be up to 720 calls per hour.
Twitter limits the maximum number of users:
Big applications like Tweetbot or Twitterrific have a lot to fear. Twitter enforces a maximum number of users per application. Since there are so many applications that have many Twitter users it was impossible to set a fixed number of maximum users for all of them. Twitter chose to take as a reference value the current number of users each application has right. It will forbid each application to grow to a value bigger than 200% of its previous number of users.
A new Twitter application will have a maximum limit of 100000 users. These newly enforced limitations will create problems for both new and old applications. Developers need to ensure their 3rd party applications run a maximum amount of queries per hour. Some queries can be delayed to be run in the next hour but most applications offer real time results. Limiting the maximum number of users can also have a negative impact on companies. Some might stop supporting or updating their applications.