It's not folder size that you measure, but a user's usage: how many blocks are occupied by files belonging to a certain user, no matter where they are.

That's what quotas are: per-user storage limits.

If Bob has a large file which is sitting in Alice's home directory, that counts toward's Bob's quota, not Alice's. If Bob could sneakily change the ownership to Alice, while leaving the permissions open so he could access the file, then the file counts toward Alice's quota.