How are the Custom Objects Limits calculated?

Question

We have an Unlimited Edition org and evaluating whether we can scale down to an Enterprise Edition. Comparing all the different limits, we came across the limit of Custom Objects. I have read the Limits Documentation, that says something about self-created custom objects and managed-package-installed objects.

1. We have 117 custom objects, created by ourselves.
2. We have 83 custom objects, added through Managed Packages.

Documentation says (Enterprise Edition):

Custom objects installed from a managed package that’s publicly posted on the AppExchange don’t count against the allocations for your Salesforce edition. For example, with Enterprise Edition, you could create 200 custom objects and install an additional 50 custom objects from public packages without issue.

What is not clear to me from the documentation, is how the calculation is done:

1. Our usage 117 + 83 additional from packages = 200 => Is 200 below the limit of 250, leaving us with room for 50 more custom objects?
2. Our usage 117 + 83 additional from packages = 200 => Is 83 above the limit of 50, and do we need to clean up 33 objects from managed packages?

What rule is the right rule?

My expectation is that rule 1 is in place. The philosophy then would be that we have room for 200 objects to be created by ourselves, with a hard limit of 250, to allow us to install some packages with objects.

That expectation is supported by documentation (Unlimited Edition):

5 The custom objects that are contained in a managed package that’s publicly posted on the AppExchange don’t count against the allocations for your Salesforce edition. At the same time, an org can’t have more than 3,000 custom objects, regardless of the source or namespace of those objects. For example, in Unlimited Edition: 2,000 custom objects created, 1,000 custom objects installed by packages. Soft-deleted custom objects and their data count against your limits. We recommend that you hard delete or erase custom objects you no longer need.

Answer 1

The example is just that, an example. With a downgrade to Enterprise, you'd have 117/200 Custom Objects used, the 83 installed packages count doesn't matter until you reach the hard limit of 3,000 total custom objects. You could conceptually have 200/200 used objects in Enterprise, and still be able to install 2,800 additional custom objects via Managed Packages (though, it's likely you'd run in to other limits, such as the 10-namespace-per-transaction limit, before you'd hit this limit). In other words, from the perspective of your question, you can easily downgrade without any problems. Keep in mind you may also lose significant storage space and API calls per day, so you may need to account for that in your final decision.