How are sandbox counts measured?
The sandbox limit is the number of sandboxes active at any one time.
You may create as many sandboxes in a month as you like, so long as the total number in existence at any one time stays within the max of your chosen plan.
Once the limit is reached, a simple "Sandbox limit reached" message is shown for new requests.
You can manually delete sandboxes, or let them naturally expire on their own. When sandboxes are deleted or have expired, you can then re-use that sandbox again and again, as long as the total number in existence at any one time stays within the max allowed of your chosen plan.