Does that mean I can only store 4gb max on that drive?
O tamanho máximo do volume é baseado em se você usa FAT12, FAT16 ou FAT32. Suponho que você esteja usando o FAT32 com base no fato de estar falando sobre 4 arquivos GiB.
Além disso, o VFAT é uma extensão do padrão de arquitetura do sistema de arquivos File Allocation Table (FAT), e NÃO é um sistema de arquivos em si.
how much data can be store on a FAT virtual drive?
Isso tudo depende se o sistema de arquivos for FAT16 ou FAT32. O FAT16 vai limitar o tamanho do volume a 4 GiB, enquanto o FAT32 limitará o tamanho do volume de 2 TiB. Vale ressaltar que as versões atualmente suportadas do Windows suportam apenas FAT32 e exFAT.
What About VFAT?
Perhaps you've also heard of a file system called VFAT. VFAT is an extension of the FAT file system and was introduced with Windows 95. VFAT maintains backward compatibility with FAT but relaxes the rules. For example, VFAT filenames can contain up to 255 characters, spaces, and multiple periods. Although VFAT preserves the case of filenames, it's not considered case sensitive.
When you create a long filename (longer than 8.3) with VFAT, the file system actually creates two different filenames. One is the actual long filename. This name is visible to Windows 95, Windows 98, and Windows NT (4.0 and later). The second filename is called an MS-DOS® alias. An MS-DOS alias is an abbreviated form of the long filename. The file system creates the MS-DOS alias by taking the first six characters of the long filename (not counting spaces), followed by the tilde [~] and a numeric trailer. For example, the filename Brien's Document.txt would have an alias of BRIEN'~1.txt.
An interesting side effect results from the way VFAT stores its long filenames. When you create a long filename with VFAT, it uses one directory entry for the MS-DOS alias and another entry for every 13 characters of the long filename. In theory, a single long filename could occupy up to 21 directory entries. The root directory has a limit of 512 files, but if you were to use the maximum length long filenames in the root directory, you could cut this limit to a mere 24 files. Therefore, you should use long filenames very sparingly in the root directory. Other directories aren't affected by this limit.
You may be wondering why we're discussing VFAT. The reason is it's becoming more common than FAT, but aside from the differences I mentioned above, VFAT has the same limitations. When you tell Windows NT to format a partition as FAT, it actually formats the partition as VFAT. The only time you'll have a true FAT partition under Windows NT 4.0 is when you use another operating system, such as MS-DOS, to format the > > partition.
Fonte: Escolhendo entre sistemas de arquivos
Adicionalmente
Further, the term "VFAT" has led to various misconceptions as well, as it is sometimes erroneously used as if it would describe another variant of FAT file system to be distinguished from the FAT12, FAT16 and FAT32 file systems, while in reality it does not specify another file system, but an optional extension, which can work on top of any FAT file system, FAT12, FAT16 or FAT32. Volumes utilizing VFAT long-filenames can be read also by operating systems not supporting the VFAT extension, for as long as they support the underlying file system.