Hi,
Yes It is true that VDR does not recommend CIFS network share of more than 500 GB.
If you have 200 VMs and would like to backup them using VDR, you should add larger size ( around 2 TB ) of vmware virtual disk ( either from NFS/SAN/iSCSI or Local Datastore) to the VDR appliance and then use it as a destination to store backup of your VMs using VDR.
Just Edit Setting of VDR Appliance and Add new Virtual Hard disk of any larger size, restart VDR appliance and use that newly created virtual disk as a destination to store your backup.
Hope this information will help you to setup your VDR.
If you find this information helpdul, please reward points !
Regards,
Sumit