Comment 3 for bug 1320157

> The question is this: why does it overflow the / rather than the /home partition?

gnome-terminal stores the scrollback content in a temporary file, opened at the standard location which is /tmp by default, overridable with the standard TMPDIR environment variable.

> May be "unlimited" should be understood as "unlimited within reasonable limits"?

g-t tries to do what you ask from this. If you ask this to remember everything, it tries to store everything. What do you mean by "reasonable limits"? E.g. 1 million lines? Feel free to set this in gnome-terminal's preferences :)