The default limitation is 500 songs, however you can set as little as 200 songs and as many as 4000 songs.
When you download more than the limited number of Offline Songs (ie., 502 songs), the system will start removing the songs you've played the least.

1. Tap [My Library] → the gear icon to the top right corner of the page → [Storage] → [Offline Song Capacity]. 
2. Choose the limit you wish to set.