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AI franz starts with 4 settlements remember, so he only got two more, and had an adjacent province to reduce debuffs at the same time. When either of these two conditions are met, you will start recieving full debuffs. I.e. you capture your full first province, you get exhausted supply lines for finishing it. If you capture another settlement, you get the strained supply lines (because you now have a single province adjacent), meaning if you capture your last settlement in province then another settlement quickly, you will get significant debuffs.
This is all intended, its called slower expansion for a reason, stop expanding so quickly and you wont get penalised as heavily :p.