You open a file and cut it. Until you save, everything happens in your browser: nothing is uploaded and nothing is re-encoded.
Cutting
The file is read straight from your device. That starts at once, even for large files, because nothing is transferred.
If the take came from the recorder, it exists only here. Download it with the button before you close the tab, or it is gone.
Saving means computing
On saving, the video goes to the server and the sizes are rendered there. That takes time and computing power — which is why that is what gets limited, not the cutting.
A plain account has two limits: how many videos are kept, and how many renders it may start in 24 hours. Where you stand is shown above the button, before you press it.