Complex sentence: He did not believe that animism was inherently illogical, but suggested that it arose from early humans' dreams and visions, and thus while being a rational system, it was based on erroneous, un-scientific observations about the nature of reality.
Split into simpler sentences: He did not believe that animism was inherently illogical, but he suggested that it arose from early humans' dreams and visions and thus was a rational system. However, it was based on erroneous, unscientific observations about the nature of reality.