Welcome aboard!
It simply means that each of the 128 holes shall be positioned within Ø0.05, with respect to the J, G, H datum reference frame, if made at 0.263. But as a hole's size is made smaller, it will be allowed to deviate more off center (bonus tolerance).
Then the lower part of the FCF says that each of the 128 holes shall be positioned within Ø0.025 if made to a size of 0.263, but the only datum here is J. So this controls the perpendicularity of each hole, but it also locates the holes to one another -- don't forget this aspect.
If a hole is made to a size smaller than 0.263, then a bonus tolerance is allowed here, just as in the upper part of the FCF.
I suspect you pose the question because it's LMC, rather than the more common MMC use of composite tolerancing. Using LMC here is legal, but I can't say whether it's wise; that totally depends on the function. I will say that this doesn't allow you to use functional gaging, which is allowed when the MMC modifier is shown.