My understanding is that the entire index is stored in memory and the actual documents are stored on disk. What is happening if the memory runs out? It simply crashes if I keep inserting new documents over what the memory of the node can keep?

If memory runs out, if you have configured swap space, the program will start swapping to disk. That's going to cause high latency and bad perf. Without swap, the OS will probably kill the program.

ah ok, is great that swap option exists