Bandwidth control is to limit other peoples access to your upstream bandwidth.

So if you have 16KB/s possible upload speed and limit upstream to 8KB/s and I am using a 56kbps modem I will see my transfer rate max at 4 to 5 KB/s at best so I simply can't use any more of your 8KB/s allowance even if I wanted.

But if I have a 500KB/s download speed (cable) and I get a file from you I will see the transfer rate max at 8KB/s because you have limited my access to your bandwidth.

simple! haha
or it could be the demon of the internet... the lag monster or the downloader could be in China.

I have 100KB/s upload and will see it flicker to 98-115 for a while when 8 people have decided that they want Chobits ep25 right now.

other times one person is on and pulling a big ep at 2KB/s

Is this non saturation with all slots full? you could simply have attracted a brace of modem users who are each downloading 5 files from 5 hosts and so will pull 0.80 from each like you see.