Complex sentence: Apparently, he did not see the player's party as a threat until they stole the Heartstone Gem from Yxunomei, to which he responded by killing Arundel--the only person he thought would be capable of using it.
Split into simpler sentences: Apparently, he did not see the player's party as a threat until they stole the Heartstone Gem from Yxunomei. He responded by killing Arundel--the only person he thought would be capable of using it.