Complex sentence: The pie maker pets Digby with a fake arm, because if he were to touch Digby again, Digby would be dead forever; the dog is quite intelligent enough to understand this and avoids touching Ned himself.
Split into simpler sentences: The pie maker pets Digby with a fake arm, because if he were to touch Digby again, Digby would be dead forever. The dog is intelligent enough to understand this, and avoids touching Ned himself.