That method is wrapping and not checking for collisions? I would not call that a problem of running out then. It's a cheap but dumb generator that needs extra bits to not break itself.

There is a limit on reliable usage of the FS. Call it what you want. The user doesn't particularly care.

What I'm trying to say is that the problem you're describing is largely a separate problem from what kbolino is describing. They are both real but not the same thing.