Ummm....maybe it would be easiest to understand with some examples.
For example, one would probably be healthier if one exercises moderation in eating: Don't overindulge in anything, including fasting (ie: having too much of nothing
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). You will sleep better and have fewer health problems related to consumption such as bulemia, anorexia, malnutrition, diabetes, heart trouble, et cetera, et cetera. THUS, we get the "All things in moderation..." part of the proverb.
For the second part, "...moderation in all things", an example could be that one should be moderate in tone of voice when expressing one's opinion. Which leads us to another proverb: "You catch more flies with honey than you do with vinegar."
The saying is a bit redundant, but, loosely, you might think of it as the first part is related to stuff you take in (food, entertainment, drugs (!), etc.) and the second is what you give out to the rest of the world.