The cache stores snapshot metadata such as index file, owner files, ecc. as well as backup data chunks. Chunks are stored in a least recently used cache, evicting older ones if no more slots are available. The cache will use as much storage space as available, therefore the recommendation to use a dedicated disk, partition or dataset with quota. Some more considerations are also to be found in the docs
https://pbs.proxmox.com/docs/storage.html#datastores-with-s3-backend