If I go over the available SEP licenses and continue to install SEP on client machines, would those client machines be able to check into the SEPM?

Yes, they will continue to check in and be managed by the SEPM. They will also continue to receive content updates (although download protection will stop updating). Other than that you will just get constant alerts from the SEPM telling you you are over license.

If you had SBE, content updates would stop.

https://www-secure.symantec.com/connect/forums/what-exactly-exposed-over-deployment-licenses

It would still Install without any issue...

There are two types of Enforcements:

When the license goes out of compliance the Symantec Endpoint Protection product goes into enforcement mode. There are two types of enforcement

1)  Hard Enforcement: SEP 12.1 Small Business Edition

• Content update downloads stop for both server and clients.In Small Business Edition it's 1:1 mapping with CAT server.
• UI changes and log notifications are started.

2)  Soft Enforcement: SEP 12.1 Enterprise Edition

•  Content update downloads continue from all the sources.
•  UI changes and log notifications are started.

Check this article: https://www-secure.symantec.com/connect/articles/sep-121-and-license-concept

Hi

Yes you can add clients with more than your purchased license.  Only it will give Attention Required on SEPM Console.

Regards

Just to be clear, when I go over the number of seats available in SEPM, clients will still show up on the SEPM as I continue to install SEP on machines?

For 12.1 Enterprise Edition, over deployed clients work normally. However you would keep receiving an alert notification for the same

Symantec Endpoint Protection Manager is showing over deployment of clients

Yes, they will show up, No problem with the Clients, 

SEPM will show a notification that you ran out of alloted license

Hi,

Q. Just to be clear, when I go over the number of seats available in SEPM, clients will still show up on the SEPM as I continue to install SEP on machines?

--> In EE it will work without any issue, but in SBE it won't work.

It depneds upon which SEP product (Enterprise Edition OR Small Business Edition) are in use.

SEP 11.x licensing is basically just a "paper" license product.  However, with SEP 12.1 the licensing is a "software" license product and uses a  license file. 

In SEP 12.1 there are two types of enforcement.

Types of enforcement

When the license goes out of compliance the Symantec Endpoint Protection product goes into enforcement mode. There are two types of enforcement

1)  Hard Enforcement: SEP 12.1 Small Business Edition (SBE)

• Content update downloads stop for both server and clients.In Small Business Edition it's 1:1 mapping with CAT server.
• UI changes and log notifications are started.

2)  Soft Enforcement: SEP 12.1 Enterprise Edition (EE)

•  Content update downloads continue from all the sources.
•  UI changes and log notifications are started. 

It would be worth to check following article:

http://bit.ly/K56HXM

Yes

If all clients check in and can be managed by an EE license, what are the risks for being overdeployed and if there aren't any risks and clients can continued to be managed, then what's the incentive for buying more licenses?

The risk is download protection stops updating, so one layer of security is lost. Aside from that, good question....

Stops updating or stops working?

Stops updating

stops updating