The lines are counted by carriage returns only - no other method is used. The lines are also counted (and the limit applied) before parsing bbcode or smilies, so it has the capacity to break tags. This is an unavoidable bug to the hack retained from the original vb2 version.
If a user has a continous line of text in their signature that takes multiple lines to display this hack cannot detect that. It's a rather quick and dirty affair. I didn't write the original - I only ported it over to vb3 because I was asked to convert a board that had this hack installed on vb2. I haven't really researched it beyond moving the code - mostly as is - to vb3.
As to setting the limit to 2, you can do that by simply putting 2 in place of $bbuserinfo['fieldX']. It might be better to just set the default to 2 when you create the user profile field - the system has to deal with the information anyway and users appreciate tools more than limits, as a rule.
Sorry for the reply delay.
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