If memory is full on a minecraft server does it create lag?

Yes on a minecraft server if the memory slot and cpu are full it will cause lag

Yes it can up to the point it crashes and kicks everyone if it can't free up the space.

Yes, it will create lag. That is because the server does not have enough place to put the next job. Think of the memory as a shopping list. A piece of paper can only hold about 50 things for the list. If you run out of room on the paper, you can't get that item. That means the player who did the thing that won't fit will get completely ignored by the server.

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