Complex sentence: The demesne is limited for each character (the maximum number of holdings being defined by the character's traits), if he has holdings above the limit of his demesne, not only he'll incur in revenue penalties, but also displease his vassals.
Split into simpler sentences: The demesne is limited for each character (the maximum number of holdings being defined by the character's traits). If he has holdings above the limit of his demesne, not only he'll incur revenue penalties, but also displease his vassals.