I run LTSP fat clienst on the 10/8 network and they work well.
However, I don't deploy a standard Debian Edu setup for diskless
workstations, so I am rather clueless what is going wrong here.
Maybe it loads an image in RAM, and if the image is bigger than the size of RAM the system is broken.
Or maybe it tries to do swapping (with a remote disk).
I don't know much details about fat-LTSP either.
I am not sure whether this problem happens only on my virtual setup, or it happens on a real setup as well (with a 1GB RAM diskless client).