This means that if for example a RM indy goes to New York with a cruiser and starts talking about declaring war, Rheinland taking over and all that nonsense, since it's outside the RM ZoI, RM can't fr5 this person or do anything about him ingame or oorply, because it's a house military and New York is outside their ZoI. It can cause a real mess.
However if a red hessian indy does the same, because red hessians aren't considered house military, they can enforce a fr5 regardless, go put the individual/group down, etc etc.
I think the problem is self explanatory. ==================== ADMIN/MOD ANSWER:Resolution under discussion