You won't see limited updates from anyone unless you are in their circles AND they are in yours. (If you have someone in your circles, but you aren't in theirs, you will still see their public posts).
Basically, when you decide who to share with you are setting the privacy level ie defining who is allowed to see that post. But that's all it is - it's just permission. No-one (who it has been shared with) will see it unless they (a) looked at the posts page on your profile, (b) have you in a circle and therefore see it in their stream, or (c) your post is subsequently shared by someone in their circle (which can happen if you don't disable resharing on the post).
Sorry - that's very wordy, and I'm tired - not sure how much sense that makes!