This isn't going to be 100% true in all cases, but what you're describing - crashing unless you limit the amount of memory in use, points to a memory defect.
Whether the defect is in GPU texture memory or main system RAM depends on what that L4D setting is doing. I don't have the game, so I don't know. But if it's limiting texture memory, then it may be your video memory. If it's limiting the amount of system RAM used by the game to swap out between the faster (but usually lower capacity) GPU memory with slower (but usually larger capacity) main system RAM, then the issue may be system RAM.
Memory issues are difficult to troubleshoot, because at the end of the day it's impractical to test for anything but the entire memory subsystem, which includes everything from onboard CPU cache, memory controllers, system RAM, video memory, the buses that connect all of that.
The fact that you've seen similar crashes in two different games may indicate that it's not a game setting you need to change.