When a tracer disappears upon some prescribed interval after firing, that projectile is removed from the world. For other non-tracer rounds on the belt the live time may or may not be the same. But at least tracers are a good visual indicator as to a projectile's real limit to existence.
Notice how a Bf-110's MG81 magenta tracers cease to exist before reaching you if the gunner is firing from a longer range? You're safe! That's because the stock live time for that gun's bullets is 1.1 seconds. Somewhat worse is the Browning .303, with a live time of just 1.0 second! You can empty your magazines and not get a single hit if the target is just 1 meter past the distance at which your bullets wink out.
Why apply such an unforgiving limitation? The game computes hit power as the projectile velocity, and so deceleration via air resistance (computed, too) is accounted for. And induced dispersion at the moment of firing (randomly applied) further reduces the hit probability. It's not like a short live time is some kind of 'cheat' reduction. Could this be a legacy of the old days, where the resource hit from considering a large number of bullets in flight at the same time was desired to be avoided?
A fairly common live time is around 2.5 seconds. But a wild departure is afforded the Browning .50, with a live time of 6.1 seconds! I think this was done mostly to show distant water splash along the lines of common gun cam clips.
In my own weapon classes I've applied a consistent live time scheme. Now those MG81s and Browning .303s have a longer reach!