Quantity Freeze limits and the client-wise position limits are different.
The quantity freeze limits how much quantity you can buy or sell in a single order.
The client-wise position limit is the number of quantities one can hold. This is set at 5% of the overall Open Interest limit by the exchanges. You can learn more about this here: What are Open interest limits?
Too early to say that. At least for next two years I do not think this is going to happen. Liquidity comes in when big funds hedge their positions. So unless they have huge positions in mid cap it won’t be as liquid as nifty.
Volatility might be higher. We are seeing that with bank nifty and finnifty anyways.