Limbo is a location outside of the normal layer of universe. In certain instances, it is entered when you die in David's rendition of The Fourth Wall. Whenever somebody loses a dimension on their existence, they are warped into this place. If it gets too full, it's fabric will literally rip, and warp everything back into place. But it RARELY gets full. Only once has that ever happened.
In Conniving Puffin, limbo and dimensions work differently than they do in real life. In this series, the real world, is the third dimension. We are all in the third dimension. But if you lose a piece of that, or you meet any of the other criteria above, then you are instantly warped into the emptiness of limbo. Limbo is the second dimension. You are basically a flat, depthless, shape, when in limbo.
It's nearly inescapable, but if you have a significant amount of alchemic power, you may be able to send people to it with the flick of a wrist, or bring people back with a snap of your fingers. Doing this however, is extremely tolling on your power.