Messages are not free to the system: every add, cancel and amend consumes matching-engine and data capacity. Venues therefore charge excess-message fees or impose ratio limits, and surveillance treats extreme ratios as a flag for quote-stuffing.
A high ratio is not automatically abusive. Genuine market makers cancel constantly because they are managing risk across thousands of instruments. The concern is messaging with no intent to trade.
Example: a venue allows 100 messages per executed trade before charging. A firm sends 640,000 messages and does 3,200 trades — a ratio of 200. The 320,000 excess messages at $0.001 each is a $320 daily surcharge, plus a place on the venue's monitoring report.
Related: quote-stuffing, self-trade-prevention, phantom-liquidity, exchange-fee