Overall questions about Subspace blockchain

What is the theoretical limit size of a single block? What is intended to be stored in the block: Transaction Data or backing up other blockchains?

Is there a reason why the best block is at 1 million in Telemetry, but best block on Polkadot is 218,000?

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Purely theoretical (in science fiction sense) block size limit in Subspace is all the space unused for which you need to spend all the coins in existence.
More realistically block size on the consensus chain is set to 5M, but due to decoupled execution most of the size will actually be in transaction bundles, I recommend you to watch some of the materials from Learn to understand the details.

Transactions store same things as other blockchains, it is just cheaper to store a lot of data on Subspace, so on Gemini 1 we’ve uploaded source code and history of the stress-test network + part of the Polkadot history to make sure everyone can fill their plots fully.

The reason for block difference is bugs in the code of older versions of Gemini 1 where some nodes started building a fork and never bothered to upgrade. They are not on the canonical version of the network, so you should ignore it until they upgrade.