If you kill all of the zombies at once, it seems like a new wave is coming, but really, it's just that you killed all the zombies, and all of them respawned at once.
So if you have it set to a max alive of 8, then 8 zombies can be alive at once during the horde, you kill one, a new one spawns to take it's place. If you set it to 64, same thing.
This kill->respawn cycle continues until the total count of zombies has run dry.