How does delegation over capacity work? How are rewards calculated and distributed in that case.
Let's say there was a 10k remaining staking capacity with a baker and I staked 1k with them on my tz1 address. A few days later say I transferred 100k xtz into my tz1 address. Then my delegation to the baker would increase to 101k xtz which would be way over capacity.
How exactly is the reward distribution mechanism work in this case? Are the lower returns on total staked xtz socialized across other accounts also.. assuming the total rewards of the baker is divided across all the delegators in proportion to their stakes.