You didn't specify if you were discussing DXi V1000 or vmPRO.
For DXi V1000, the 1TB is the usable capacity, regardless of the source size of data.
So, if you have a 15:1 dedup ratio, you could store 15TB effective original data.
For vmPRO, the 1TB capacity limit is on the ALLOCATED VM size. So, if you have 10 Virtual Machines, each with 200GB allocated, that's actually 2000GB, or 2TB. Regardless of the actual capacity in use of those VM's, this use case would exceed the 1TB license.
In vmPRO, if you exceed your licensed capacity, you will receive a warning on a daily basis. Backups continue to function, but you will be cautioned about the capacity.