I just want to make sure I'm understanding this correctly. I've read the max height is about 400ft and the max distance is about 900ft. If I go higher, say 300ft does that reduce the max distance or does it remain around 900ft?

distance is just limited by LOS and your RC transmitter.  ive seen posts of distances WAY farther than 900ft.

as for the range, i think it is radius based.  a higher altitude makes for a longer hypotenuse so i think what matters is how far it is from you (hypotenuse) not the height and distance themselves.

The way I see it you are flying in a cylinder. If you are set to max height of 400 and max radius of 900, it is like the phantom was connected to a  900' string that can slide up and down a 400' pole.

If the limits are set well below the transmitter's range-capability, like in your example, you need not worry about losing contact. You will be able to fly 900' away, 400' high. If, however, you RESET the limits, and then took your bird to such an awesome height where it was right on the edge of losing contact with transmitter---I'm not sure I'd trust it to go too far.