The principle
A serpent crushed only halfway will strike with double the venom. Leave no embers to reignite; mercy that is incomplete invites a second war.
The application
In its raw form this law is one of the book's ugliest. The civil reading: if a conflict has been forced on you and won, do not let sentiment leave the loser with the means and motive to come back. The unfinished fight is the one you fight three times.
The defensive tell — how to spot it being run on you
When an apparent victory comes too easily — the opponent gracious, the terms generous, the closure complete — check what was retained: a board seat, a vendor relationship, a piece of IP. Half-defeats often hide a foothold for the next move.