With lower max bet you're effectively having a higher house edge for larger wagered amounts.
Please elaborate since a lower maximum bet would only lower variance. How would it affect the house edge?
I wouldn't affect the house edge. I think what he means is that applying the "keep-betting-till-I-reach-my-target-profit-or-bust" strategy has a lower chance of success as the ratio of max_bet_size / target_profit gets smaller. The lower max bet size has a similar overall effect on this particular strategy (given a constant target profit and bankroll) as keeping the max bet size the same but increasing the house edge.