Max Protection Level
This is because when the price of Token A is expressed in terms of Token B (the base token), impermanent loss protection is capped to the downside, as Token A can never be worth <0 of Token B. However, impermanent loss protection is uncapped to the upside, as there is no upper limit to the price of Token A in terms of Token B.
NIL contracts cap the maximum ILV amount for each contract at 50% of the implied LP value, using the Token A strike price. This means that impermanent loss can be perfectly hedged using NIL contracts as long as Token A moves [-100%, +300%] against the strike price.
If Token A goes up more than 4x against Token B, then impermanent loss is no longer protected using that NIL contract because the collateral backing its ILV has been fully wiped out.