Compiler will fail to handel -Xmaxerrs will -ve numbers.
Though there are less chances that users to give -ve number for setting an error but compiler should give different output, say like -Xmaxwarns.

When I tried like:
<output>
bash-3.00$ javac -Xmaxerrs -4 Test16.java
An exception has occurred in the compiler (1.6.0-ea). Please file a bug at the Java Developer Connection (http://java.sun.com/webapps/bugreport) after checking the Bug Parade for duplicates. Include your program and the following diagnostic in your report. Thank you.
java.lang.NullPointerException
        at com.sun.tools.javac.comp.TransTypes.retype(TransTypes.java:136)
        at com.sun.tools.javac.comp.TransTypes.visitApply(TransTypes.java:514)
        at com.sun.tools.javac.tree.Tree$Apply.accept(Tree.java:992)
        at com.sun.tools.javac.comp.TransTypes.translate(TransTypes.java:346)
        at com.sun.tools.javac.comp.TransTypes.visitExec(TransTypes.java:477)
        at com.sun.tools.javac.tree.Tree$Exec.accept(Tree.java:888)
        at com.sun.tools.javac.tree.TreeTranslator.translate(TreeTranslator.java:43)
        at com.sun.tools.javac.tree.TreeTranslator.translate(TreeTranslator.java:55)
        at com.sun.tools.javac.tree.TreeTranslator.visitBlock(TreeTranslator.java:146)
        at com.sun.tools.javac.tree.Tree$Block.accept(Tree.java:630)
        at com.sun.tools.javac.comp.TransTypes.translate(TransTypes.java:346)
        at com.sun.tools.javac.comp.TransTypes.visitMethodDef(TransTypes.java:381)
        at com.sun.tools.javac.tree.Tree$MethodDef.accept(Tree.java:545)
        at com.sun.tools.javac.tree.TreeTranslator.translate(TreeTranslator.java:43)
        at com.sun.tools.javac.tree.TreeTranslator.translate(TreeTranslator.java:55)
        at com.sun.tools.javac.tree.TreeTranslator.visitClassDef(TreeTranslator.java:120)
        at com.sun.tools.javac.comp.TransTypes.translateClass(TransTypes.java:690)
        at com.sun.tools.javac.comp.TransTypes.visitClassDef(TransTypes.java:368)
        at com.sun.tools.javac.tree.Tree$ClassDef.accept(Tree.java:487)
        at com.sun.tools.javac.comp.TransTypes.translate(TransTypes.java:346)
        at com.sun.tools.javac.comp.TransTypes.translateTopLevelClass(TransTypes.java:713)
        at com.sun.tools.javac.main.JavaCompiler.desugar(JavaCompiler.java:722)
        at com.sun.tools.javac.main.JavaCompiler.desugar(JavaCompiler.java:665)
        at com.sun.tools.javac.main.JavaCompiler.compile(JavaCompiler.java:549)
        at com.sun.tools.javac.main.Main.compile(Main.java:680)
        at com.sun.tools.javac.main.Main.compile(Main.java:611)
        at com.sun.tools.javac.main.Main.compile(Main.java:607)
        at com.sun.tools.javac.Main.compile(Main.java:70)
        at com.sun.tools.javac.Main.main(Main.java:55)
bash-3.00$
</output>

I am not very sure whether code required or not but any way if required , please use the following code to reproduce.
<code>
class TestConstructor<T,K>{
    T t;
    K k;
    public TestConstructor(T t,K k){
        this.t =t;
    }
    public TestConstructor(K k){
        this.k = k;
        this.t = null;
    }
    public TestConstructor(T t){
        this.t=t;
        this.k=null;
    }
    public void setT(T t){
        this.t=t;
        this.k=null;
    }
    public void setT(K k){
        this.k = k;
        this.t = null;
    }
    public void setT(T t,K k){
        this.t = t;
        this.k = k;
    }
}
class TestC<T>{
    T t;
    public <T>void setT(T t){
        this.t = t;
    }
}
public class Test16{
    public static void main(String... arg){
        TestC tC =new TestC();
        tC.setT();
        TestConstructor tc = new TestConstructor("saaa");
        tc.setT("sasa");
        TestC<Integer> tC1 = new TestC();
        tC1.setT(545);
    }
}
</code>