Yes, when the roots bind up growth will stop. Plant will not die.
I leave extra clones in their 8 oz cups, they reach about 10" max and stop. I have got over 20" out of a quart, so the stop point is out there a ways.
The formula that works for me is about 4 oz per gallon just regular food and light. Sativa versus Indica makes a really huge difference in height with the same small containers, whereas yields are consistant with pot size for me.