diff --git a/docs/channels.md b/docs/channels.md
index de4ab94d0..c06a9fe16 100644
--- a/docs/channels.md
+++ b/docs/channels.md
@@ -164,10 +164,20 @@ the system channel templates it creates, so the library-to-lineup builder (which
 are left alone, so builder-created and auto-tuned channels there inherit whatever the template
 already specifies.
 
-**Limitation:** a logo set via **External logo URL** cannot drive the bug. `WatermarkSelector`
-resolves it to the URL and then `File.Exists`-checks it, which is never true, so the watermark is
-silently dropped — the URL wins for the guide listing but disables the on-screen bug. Tracked as
-**#502**; the editor does not offer a bug preview in that case.
+**External logo URLs drive the bug too, since #502.** `WatermarkSelector` used to resolve the URL
+and then `File.Exists`-check it — never true for an `http(s)` path — so the watermark was silently
+dropped and the URL won only the guide listing. It now passes through to the graphics engine, which
+fetches and composites it. (The editor still offers no bug preview in that case.)
+
+**A remote logo is fetched under bounds, and exceeding any of them disables the bug rather than the
+stream** (#511). The fetch gets a **10s** deadline covering headers *and* body, a **10 MiB** wire
+cap, and at most **3 redirects**; the decode is capped at **50 MP total** (`width x height x
+frames`) and **600 frames**, and the scaled frames retained for compositing at **200 MP**
+(`frames x scaledWidth x scaledHeight`). A logo that busts a limit — or a host that is slow, dead or
+serves a non-image — logs a warning and renders the channel with no bug; it never kills the stream.
+Practical effects: an animated overlay scaled to full 1080p is limited to ~96 frames (~3.2s at
+30fps), and an 8K still (~33 MP) is fine. The image is re-fetched per playout item, not cached; the
+rationale for each limit is in `docs/decisions.md`.
 
 Note: `ChannelLogoGenerator.GenerateChannelLogoUrl()` hardcodes `localhost` for watermark logo
 fetching — see issue #1 for details.
diff --git a/web/src/screens/ChannelEditScreen.tsx b/web/src/screens/ChannelEditScreen.tsx
index f4e9831c9..5b743b721 100644
--- a/web/src/screens/ChannelEditScreen.tsx
+++ b/web/src/screens/ChannelEditScreen.tsx
@@ -798,7 +798,7 @@ function BrandingPane({
             logoBugTarget == null
               ? 'No logo-driven watermark preset exists yet.'
               : externalUrlLogo
-                ? 'An external logo URL cannot be used as the on-screen bug — upload an image instead.'
+                ? 'Overlays this channel’s own logo on the stream. An external URL is fetched at render time, so no preview is shown here.'
                 : 'Overlays this channel’s own logo on the stream, using the shared preset’s position and size.'
           }
           label="Use logo as on-screen bug"