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It means that during the 10 seconds that you have the damage boost, even if you are healed back to 100% health you don't get the damage reduction back until after the 10 seconds has elapsed.
It ensures that you can have either damage reduction, or damage boost. But never both at the same time.
When you are at full health, YOU gain 40% damage reduction.
After you take damage at full health, you gain Serpent's Rebuke for 10s.
During these 10s, you do not benefit from the 40% damage reduction.