Parent Credit Limit is considered regardless of the Child Credit Limit.
To illustrate: If Parent Credit Limit is 50,000, and has 5 Child Customers with 10,000 Open Invoices each, then they have reached their Credit Limit. If Customer Credit Limit Handling = Enforce Holds, the Parent Customer won't be allowed to enter even one dollar.
In the same example, a Child Customer can exceed its Credit limit of 10,000 as long as the Parent Credit Limit is not yet reached.
If case the Credit Limit of the Child Customer exceeds the Parent, the Parent Credit Limit will still be followed.
Note: Enhancement 135227 - Provide ability to have Per Child Credit Limit and Hold functionality when using the Consolidated Payments feature.