in sp.test:

create function f1(p1 integer, p2 integer)

returns int

begin

  declare count int;

  set count= (select count(*) from (select * from t1 limit p1, p2) t_1);

  return count;

end|

select f1(0, -1)|

limit values are used in JOIN::optimize invoked from mysql_derived_optimize.
While limit values are set in st_select_lex_unit::set_limit invoked from mysql_derived_fill invoked from mysql_derived_optimize. Later in the execute flow.
Full stack traces are attached.