Here are the modifiers I used to create 2 versions of the source smartlist:
playlist 1
~sort=[Artist],[Last Played] ~limit=-1,10,[artist] ~sort=[Artist],[Date (year)],[Album],[Disc #],[Track #] ~nodup=[File Size],[Filename]
playlist 2
~limit=-1,10,[artist] ~sort=[Artist],[Date (year)],[Album],[Disc #],[Track #] ~nodup=[File Size],[Filename]
The number of songs on playlist 1 stays the same - 403 songs.The number of songs on playlist 2 jumps between 400, 401 and 402. The only thing different on the second playlist is the number of Nirvana songs that get left out - 1, 2 or 3. Now why would some songs by Nirvana not get included in a smartlist if I use the limit of 10 songs per artist and the total number of Nirvana songs I have is 10?
Thanks
UPDATE: Source smartlist has "last played is not in the last 12 hours" rule. At the time when I first posted it source smartlist contained 509 songs out of potential 510 (1 song was played within last 12 hours at the time of the post).
Now as time has passed the source playlist is back at 510 songs. Playlist 1 has 404 songs and the number stays the same. The number of songs on playlist 2, however, jumps between 401, 402, 403 and 404. So it either skips nothing or skips up to 3 songs by Nirvana.