Unbounded isn't the same as infinite. For example, if you have a fair coin, the number of times you have to flip it until you get 5 tails is unbounded but finite.
The problem with creating infinitely many threads isn't even space. Even if you had an infinite amount of memory, programs are supposed to complete their tasks in a finite amount of time, so you shouldn't spawn infinitely many threads, because it's an unreasonable thing to want. On the other hand, spawning 100k green threads is a perfectly reasonable thing to want. It's the language runtime's job to multiplex these 100k green threads over 4 or 8 or however many OS threads make sense.
