Kubernetes: CPU Limits at (200%)?
This works exactly in the way you're describing.  You have two pods which each have a limit of 4 CPUs scheduled on the same node; so the total of the limits on that node is 8 CPUs; which is 200% of the node's physical capacity; and if the two nodes combined go over the node's physical abilities then the host kernel will time-slice available resources.  For CPU there's nothing especially wrong with this.

The exact same presentation in the kubectl describe node output applies to memory, and there is the potential for trouble with that: if your pod limits add up to 200% of a node's physical memory, and together they exceed the physical capacity, then the host kernel will respond by killing one of them off.  Lower requests will allow more things to be potentially scheduled on the same node, but keeping requests closer to limits gives you a better chance of them staying running long-term.