If every VPS on Digital Ocean and Linode actually used their quota, they wouldn't have uplink capacity to support it and the network would fail. That's overselling. Numbers that high are extensive overselling. Linode has 40 Gbit links (at least they used to), and give 2 TB (6 Mbps) to each small Linode, meaning about 7,000 Linodes actually using the quota would saturate the link. They have a few more than that. Do the math.
The bandwidth quotas are sales stuff so that you will say exactly this in threads like these, and it's amazing how well it works.
my favorite is the collab he did with Trent Reznor on I'm Afraid of Americans https://www.youtube.com/watch?v=gPVrFIP0CMs