SSSharma, you should find that article referenced or look at some other sources such as the GPSA engineering data book, API 521, etc to understand how the theory of separator design. You can also request information from companies like Koch/Glitch or ACS who manufacture demisting devices and have information on the theory of sizing. Simply using a piece of software when you don't understand the theory leaves you open to a mistake that you won't catch (and it will be your fault, not the software, you are ultimately responsible for ensuring any results out of software are realistic).
The maximum capacity depends on several factors. Typically, for a vertical vessel the diameter is sized for a maximum gas phase superfical velocity which is a function of the gas density, the liquid density and an empircial factor but there is nothing sacred about the velocity number you come up with. If you have a lot of very fine droplets (and that number is VERY difficult to estimate up front), a separator can have problems. If the separator is ahead of a recip compressor, I'm going to want to use a lower velocity than if I'm removing bulk liquid prior to cooling the gas in a heat exchanger. If some liquid carryover isn't a problem (or isn't as much as a problem as in other services), you can accept a higher velocity and save $$ by building a smaller vessel or in your case, increasing throughput. Software won't consider this for you.
A horizontal separator is more complicated because of the iterative nature of the design. Essentially (and API 521 does a good job explaining this), you size the diameter so that all liquid particles above a certain diameter will settle out of the gas to the liquid phase before the gas carrying the liquid travels through the vessel and reaches the exit. However, each time you change liquid height or the diameter, the gas velocity also changes and you need to redo the calculations to ensure you will down to your droplet size cut-off.
The capacity is definitely not a single design point that everything will be fine if you run less than it and problems will happen if you run over, it's much more subtle.