Why does the GUI allow a height and width range of 8 to 16 for the FONT RAM size?
The GUI does allow you to select anything between 8 and 16 for the width and the height. However, the OSD core itself only supports 8x8 or 16x16 as noted in the data sheet and user guide. If a user enters a number between 9-16 inclusively, it will generate the core using 16x16 size FONT RAM.
For a detailed list of LogiCORE IP Video On Screen Display Release Notes and Known Issues, see (Xilinx Answer 33257).