I remember reading somewhere that teams who take more than 3 walk-ons will have stunted player development. Does the same apply to number of ineligible players, and/or ineligibles and walk-ons combined?

i think it is walkons only, even though it would make sense for it to be full-year ineligibles (ineligible recruits) because they don't practice. i don't think they count - but not 100% on that. definitely the in-season ineligible guys don't count.

also, the amount of stunted development is relatively minor, not worth sweating much. i think its also on the 3rd walkon when the penalty starts, but this is a pretty stand-alone issue (it doesn't connect to much else) and the penalty is minor, so my grasp on these details is definitely not the best.

way better to take that penalty than sign a guy you should not sign

it is small