We try to guess whether we'll need extra registers or slots to handle large stack offsets (bigger than a single [sp, #N] can handle). This calculation needs to take into account stack that's in the caller's frame, either our own args or involved in calls we make.
Bit of a messy test, but it needs to both have lots of args to actually use significant stack, and be opaque enough that it also uses many registers. So the usual [8 x i64] tricks to quickly use args don't work.
To be clear, this is looking at arguments passed on the stack by the caller of this function definition? If we use a frame index to access them, and we don't have a frame pointer, they need to count towards the stack limit, sure.
Referring to this as the "callee's stack" is a bit confusing.