Everything should be made as simple as possible, but not simpler.
Simplicity is a virtue only until it starts to distort. The idea is that a good explanation, design, or plan should strip away everything unnecessary, yet stop at the point where cutting more would falsify what you are describing. Clutter hides the truth, but so does oversimplification. The skill lies in knowing which parts carry the weight.
This fits the outlook of a physicist who prized elegant theories but insisted they still account for the facts. Strictly speaking, the wording is probably a tidy paraphrase of remarks Einstein made about scientific theory, not a verbatim line, so the attribution is a little loose. The spirit, though, matches his view that a theory should be as economical as possible without abandoning what experience demands.
Imagine you have to explain a health decision to an elderly parent, such as why a doctor changed their medication. Dropping the pharmacology jargon and saying "this one protects your heart better" is good simplification. Leaving out that it can cause dizziness, and that they should stand up slowly, is simplifying too far. Keep the plain language, but keep the one detail that matters.