Experience penalties

[Dash Dannigan]

- for every 100Xp gained, you effectively get only 80Xp

That's correct, according to the example in the phb. So AuraSeer's example point is correct, the character's abilities are spread so thin this character would be unable to progress in levels except by a wish spell or some such magic to raise or remove one of the other classes.

 

[AuraSeer]

Does it say in the PHB exactly which is of the following two:

- for every 100Xp gained, you effectively get only 80Xp

It's that one. The example given is of a character who is awarded 1200 XP, but receives only 960 because of his multiclass penalty. 960 is 80% of 1200.

If he had two multiclass penalties, he'd receive 60%, or 720.
Three penalties means 40%, or 480.
Four penalties means 20%, or 240.
Five penalties, 0%... and no levels ever again.