Query Governor Cost Limit relationship with Time
Based on my notes from  SQL Server internals (by Kalen Delaney).... below is my understanding

Query Governor Cost limit is the max no. of seconds that a query can run.

So, essentially :


a non-zero or a negative value will disallow execution of any query that has an estimated cost exceeding that value.
Zero which is default - turns off the query governor and all the queries are allowed to run without any time limit.



  Note that the value set for seconds isn’t clock-based. It corresponds to seconds on a specific hardware configuration used during product development, and the actual limit might be higher or lower on your machine.


Also, it should be noted that changing the Query Governor Cost limit will flush the entire plan cache resulting in generating a new plan afterwards.