Hi Cascott,
The first sentence creates a clear either/or-but-not-both dichotomy: acceptable theories are either rehabilitationist or retributivist, but not both. Increasing sentences for repeat offenses make a retributivist theory unacceptable (but not necessarily a rehabilitationist theory). So to diagram this:
Acceptable Theory of Criminal Sentencing
Retributivist or Rehabilitationist
Retributivist
Acceptable Proportional
Longer Sentences for Repeat Offenses
and the contrapositive
Longer Sentences for Repeat Offenses
Proportional RetributivistAcceptable
So if we have an acceptable theory that advocates longer sentences for repeat offenses, we can see that it can't be retributivist, which means it can only be rehabilitationist.
Hope this clears things up!