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What are you talking about? RAG is a method you use. It only has limitations you design. Your datastore can be whatever you want it to be. The llm performs a tool use YOU define. RAG isn't one thing. You can build a rag system out of flat files or a huge vector datastore. You determine how much data is returned to the context window. Python and chromadb easily scales to gigabytes, on consumer hardware, completely suitable for local rag.
I explained what I did, and how it worked.
generally, this: https://www.youtube.com/watch?v=qV1Ab0qWyT8
the numbers came from my experience, ymmv.