From the limited amount I understand, tails runs on the ram of the computer you boot it to. So what decides the storage capacity? (Regular storage, not persistent storage.) For instance, when i download a file it is automatically saved to the file Tor Browser, not Tor Browser (persistant). Does that mean that the file is stored on the ram, therefore the capacity is dependent on how much ram the system has? Minus however much the os is using? Or is it stored somewhere else?
According to the Tails documentation all data gets saved to RAM, where it stays for as long as Tails is running (See here).
Since only RAM is used as regular storage it makes sence that the size of the RAM decides the storage capacity.