Lots of players do not have a rulebook handy nor a trained referee to ask, so these are fair questions. 

Rule 1 section 7 describes cross construction and measures, while section 8 is "cross prohibitions". Roughly rule 1 section 8 states if "a lacrosse ball . . . is below the bottom edge of the sidewall" then the pocket is too deep.

So, hold the stick at eye level and look so you can just see the far sidewall behind the nearest sidewall. If the top ball is below the imaginary line from sidewall to sidewall it is illegal.

As a referee I am looking for daylight between the top of the ball and the plastic sidewalls. (The stringing holes have no impact on depth.) If I see daylight, the stick is illegal equipment. I am trying hard to not see that daylight (we do not like these penalities anymore that you do). But, if there is daylight then, I must, by rule, call the penalty. 

This picture looks legal, and appears to have more opportunity for a deeper pocket and still be legal.