The number of concurrent streams is based on the device serving the content. So in this specific example above, if a movie being played resides on the Strato's hard disk then that movie would only be playable concurrently in two zones. Furthermore, if the Strato that is serving that movie to another zone is also playing a movie (either the same one or a different one) then no other concurrent playback sessions from that Strato are possible.
Here's another way to look at it. Let's say you have a system with a Terra, a Strato and two Strato C players. Content is spread across the Terra and Strato.
If one Strato C started playing a movie from the Strato's HDD, and the other Strato C started playing a movie from the Strato's HDD (either the same one or a different one), then the Strato's concurrent stream limit has been reached and nothing could be played locally on the Strato until one of the remote playback sessions was terminated.
Similarly, if the Strato started playing a movie (that resides on the Terra's HDD, then only one Strato C would be able to play a movie that resides on the Strato's HDD since that would hit the Strato's limit of 2 concurrent playback sessions. The second Strato C would only be able to play movies that reside on the Terra's HDD.
However, all three zones (and up to 7 more) would be able to play content that resides on the Terra's HDD.
This is why once you start talking about more than 2 zones (or you want to add in Co-Star) it makes more sense to buy a Terra and multiple Strato C's rather than using multiple Stratos.