I always assumed that the speed setting is only informational and is used for download time estimates. I have never seen anything that would suggest otherwise – until I read this answer. I still don't believe that it is used as a cap; however I also think the remaining time estimate is computed from the current speed. How it really is?
Steam – Does setting a connection speed in Steam limit bandwidth usage
steam
Related Solutions
Yes as of May 2013. http://store.steampowered.com/news/10548/
Added rate-limiting of Steam game downloads, via Settings -> Downloads
AT LAST
In Steam, go to the menu on the top left and look for the settings menu entry.
Within the new window that pops up, look for in-game.
You will see this:
On this screen you can define how often Steam is pinging servers when looking them up. A slightly lower value might improve your experience drastically, as mentioned on the screenshot.
However, this only works for games that utilize either the source engine or the Steamworks infrastructure for their servers. It won't work for other games.
Best Answer
I don't believe that the Steam connection settings are used in any meaningful way to effect download speeds. I know they are part of the Steam Hardware Survey, but your download speed is simply a factor of the maximum speed your connection to the Steam servers can sustain.
The "Time Left" is a reflection of the amount of data left to transfer, and recent instantaneous speeds between your machine and the Steam servers.