Keep in mind this is a 32-bit system. As a result it has at most 3.5 gigs of memory for the entire system, and e.g. on windows this will limit a single process

Keep in mind this is a 32-bit system. As a result it has at most 3.5 gigs of memory for the entire system, and e.g. on windows this will limit a single process to 2 gigs. If the sync client keeps some kind of in-memory representation of your files (a very reasonable thing to do for the vast majority of clients), and if you have 700,000 files, and assuming that folder references magically take up no space and that the sync client uses no other memory whatsoever, that's less than 3k per file representation before you crash. If that is indeed contributing to the problem, it's most likely just a case of doing what's optimal for normal workloads, and simply not having engineered a backup solution for cases which fall so far outside of your expected usage that it didn't seem worth considering at the onset. This kind of change would also be very non-trivial to engineer, likely requiring a rather large amount of refactoring.