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If I offer music lessons and I fill up all my time slots will people still be able to purchase a lesson OR will I be able to MARK that I can no longer accept gigs as I am at full capacity? 

For example If I am available to teach 4pm-6:30pm Monday & Thursdays for 30 minute lessons, and all times slots booked; that would be 10 students total. 

I'm worried that someone else will purchase a lesson and I will have no time slots available, what would I do?

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Once you've made a gig, there's a a toggle that will let you limit the number of orders in queue.

That said, but the odds of you completely filling up your slots (via Fiverr) is pretty unlikely. Not due to your skill, but due to demand. If you did find yourself overbooked, what most sellers do, if they start getting too many orders, is raise their prices. 

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