When you go to the Duplicate Management tab in Luminate CRM, it pulls the first 1000 duplicate matches in this table. The recommendation is for 1000 because pulling more would be more taxing on system resources. Understand that if you resolve some of those duplicates, then go back to Duplicate Management later, it will pull the first 1000 duplicate matches in the table minus the ones you have resolved. 
So, to clarify, it is not that it is not checking all records, it is that you are only seeing a list of 1000 of the matches that have been checked at one time.