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Recall that the ext2 filesystem keeps pointers to each of the data blocks in a file. For holes, a zero is used for this pointer. However, for compressed clusters, the missing blocks are indicated not with a zero but with the largest representable 32-bit number, hexadecimal FFFFFFFF.
Yes, this does mean that the largest possible ext2 filesystem is now 4KB less than the previous maximum of 16 terabytes (assuming 4KB-blocks).
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