Because that data has to go somewhere, and the hit will vary from system to system depending on your hardware, also a lot depends on the game too, but most games will try and use system memory first, and then SSD/HDD
So in short the difference could be an acceptable drop in FPS that you can live with or slideshow or just come to a standstill and crash
Personally id rather fine tune my settings and avoid and Vram issues if its an issue
Nope. Once you run out of VRAM it will flood your system memory, which no matter how fast is still chronically slow, and then once you hit the SSD it's indefinitely game over.
Neither of which matter though, as the hit on performance once you've overflown will be totally unplayable. Going through system memory is painful, it's not like it's directly communicating with the PCI bus either, it's got to go through DX and account for various other overheads, so once it's arrived where it needs to be it's travelling way below peak memory bandwidth anyway.
Once you're exceeding VRAM limits, it's game over. No other way around it other than to either dial it down or get a new card for the game in question.