Bruh, this is not that hard…
1. No team can “advance” in the draft by way of lottery wins more than twice in a five year period; “advance” meaning they cannot receive a better position by way of the lottery than they held previous to the lottery more than twice in five years. If a team finish #1 and wins the lottery it would not be counted for purpose of this limitation as that team did not advance by way of the lottery.
2. This is confirmed with the “This limitation will not affect a Club’s ability to retain its presumptive Draft position in any Draft Lottery” language, meaning the 5 year limitation doesn’t prevent a team from receiving the #1 overall pick if that was their presumptive draft position prior to the lottery, and they or a team starting from #11 or higher wins the lottery.
3. It is interesting that the limitation is attached to the team and not the pick. So if Chicago again finishes better than last, and again wins the lottery to advance to the first pick, for the next three years they would be ineligible to advance via the lottery; but any team receiving Chicago’s 1st via trade during that period WOULD be able to advance (barring their own current status under theses limitations)