The more vaults there are, the more expensive it will be to purge a bad position, until the point that will be economically not viable do liquidations.
Either because meowntainer role has bad intentions or simply he is not aware about the number of created vault, a consider number of vault can become economically not viable purge a bad position.
The inability to liquidate the position will cause the vault to incur financial losses, rendering it obsolete, for that reason this vulnerability has a medium impact.
Manual review
Add a restriction in the max number of vault that is possible to create, in this case the max number would be 20 vaults, according with the documentation.
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