Standard setting is 20, and it is recommended settings.
Short answer: Think of it as maximum allowed concurrent connections to php/cgi scripts for the site.
Long answer: The way CloudLinux/LVE works -- once request comes in into apache, our module intercepts it and places apache process that will handle that request into LVE. We call that process "entry process". Once request is done, we take that process out of LVE. If there are already "max" entry processes in LVE -- LVE rejects new process, and our module returns 503 error via apache. We implemented it so that slow site wouldn't take up all the apache connections. Now, this entry processes are not limited to apache, as any process that "enters" into LVE is considered entry processes. And such processes includes cron jobs for that users, and depending on the settings, shell access. Also, note that if any of the entry processes forks, creates children processes, runs another program -- we don't count that as entry process.