set to 3500.  Two users concurrently downloading (my client uploading to theirs) with the total rate peaking at 4.5 MB/s.  Is this feature meant to limit the global rate?

if the bandwidth limiter is only set on upload, the protocol will use more overhead on upload when downloading, you need both on to balance it out. you may also find that with download limiter on, things download smoother, and quite often a bit faster... be patient, it will take time to tweak it just right for your connection.