This limit is based on risk of central nervous system oxygen toxicity, and is somewhat arbitrary, and varies depending on the diver training agency or Code of Practice, the level of underwater exertion expected and the planned duration of the dive, but is normally in the range of 1.2 to 1.6 bar.
[1] The MOD is significant when planning dives using gases such as heliox, nitrox and trimix because the proportion of oxygen in the mix determines a maximum depth for breathing that gas at an acceptable risk.
Atmospheric air contains approximately 21% oxygen, and has an MOD calculated by the same method.
Acute, or central nervous system oxygen toxicity is a time variable response to the partial pressure exposure history of the diver and is both complex and not fully understood.
Central nervous system oxygen toxicity manifests as symptoms such as visual changes (especially tunnel vision), ringing in the ears (tinnitus), nausea, twitching (especially of the face), behavioural changes (irritability, anxiety, confusion), and dizziness.
[2][3] The onset of seizure depends upon the partial pressure of oxygen in the breathing gas and exposure duration.
[2][4][5] In addition, many external factors, such as underwater immersion, exposure to cold, and exercise will decrease the time to onset of central nervous system symptoms.
[6] Decrease of tolerance is closely linked to retention of carbon dioxide.
[7][8][9] Other factors, such as darkness and caffeine, increase tolerance in test animals, but these effects have not been proven in humans.
[1] The formula simply divides the absolute partial pressure of oxygen which can be tolerated (expressed in atm or bar) by the fraction of oxygen in the breathing gas, to calculate the absolute pressure at which the mix can be breathed.
So the 1 atmosphere or bar contributed by the air is subtracted to give the pressure due to the depth of water.