"1 year/1000 posts" refers only to unread posts, which makes sense to me. If you have thousands of unread posts, chances are you don't care that much about them.

I'm not sure what their policy on read posts is. I'm a premium user and a quick search shows up a (read, but not liked or shared) post from 2011. It says here that liked and shared posts are stored forever:

https://theoldreader.uservoice.com/knowledgebase/articles/14...