I think that's the game's networking limit being reached, not the VPS's fault.
No, I once hosted 40 players on Buttman's Endless Zombies server, and they used 12 Mbps in total. I'm sure Boss battles with 40 players uses much less than this. You have no idea how much bandwidth a zombie gamemode uses.
Also, another reason it's probably CPU is because HammerHost was originally on Server mania. Pecon uses this provider right now. The reason I quit Server Mania is because their CPU was not good enough.