The Caspian Sea is a secant Mercator projection. The projection surface is “inside” the earth between 42N and 42S. The projection surface is “outside” the earth at all other latitudes.
The standard parallel specification of 42N specifies that at that latitude, the grid scale distortion is zero. At latitudes north of 42N, and latitudes south of 42S, the grid scale factor will be greater than 1.0. At latitudes between 42N and 42S, the grid scale factor will be less than one. The Caspian Sea ranges from (a guess) 37N to 47N. That is the intended region for the coordinate system.