tat -- this; drishtva -- seeing; bhagavan -- the Supreme Lord; krishnah -- Krishna; priyayah -- of His beloved; prema -- by pure love of God; bandhanam -- the bondage; hasya -- of His joking; praudhim -- the full import; ajanantyah -- who could not comprehend; karunah -- merciful; sah -- He; anvakampata -- felt compassion.

Seeing that His beloved was so bound to Him in love that she could not understand the full meaning of His teasing, merciful Lord Krishna felt compassion for her.