Он понимает вред этой привычки.

Because the noun вред often takes a dependent noun in the genitive to show the source or possessor of the harm.

So:

• вред = harm
• вред чего? = the harm of what?
• вред этой привычки = the harm of this habit

This is a very common Russian pattern. Compare:

• польза спорта = the benefit of sport
• последствия ошибки = the consequences of the mistake
• причина пожара = the cause of the fire

So этой привычки is not the direct object of the verb; it depends on вред.

Вред is in the accusative case, because it is the direct object of понимает.

However, for an inanimate masculine noun, the accusative singular looks exactly like the nominative singular. So:

• nominative: вред
• accusative: вред

That is why the form does not change.

Because этой agrees with привычки, and привычки is in the genitive singular.

The noun привычка is feminine, so the demonstrative этот must match it in:

• gender
• number
• case

Forms you might compare:

• nominative: эта привычка = this habit
• accusative: эту привычку
• genitive: этой привычки

Since the sentence has вред этой привычки, the phrase after вред must be genitive, so этой is the correct form.

Because it is in the genitive singular.

Привычка is a feminine noun ending in -а, and many such nouns form the genitive singular by changing:

• -а → -и (or sometimes -ы)

So:

• nominative: привычка
• genitive: привычки

Here it is genitive because it depends on вред: вред привычки.

Понимает is the 3rd person singular present tense form of понимать.

Breakdown:

• dictionary form: понимать = to understand
• он понимает = he understands

This verb belongs to the first conjugation pattern, so you get forms like:

• я понимаю
• ты понимаешь
• он/она понимает
• мы понимаем
• вы понимаете
• они понимают

In this sentence, он is singular, so понимает is the correct form.

Russian has no articles like English a/an and the.

So Russian simply says:

• Он понимает вред этой привычки.

Whether English translates that as:

• He understands the harm of this habit
• He understands the harm caused by this habit
• He understands this habit’s harmfulness

depends on context.

Russian usually shows definiteness through:

• context
• word order
• demonstratives like этот / эта / это / эти
• general meaning

Here этой already makes the phrase fairly specific: this habit.

Yes. Russian word order is more flexible than English, because case endings show grammatical relationships.

The neutral order here is:

• Он понимает вред этой привычки.

But you could also hear:

• Вред этой привычки он понимает.
• Этой привычки вред он понимает. (less neutral, more marked)

These different orders change focus or emphasis, not the basic meaning.

For a learner, the original order is the most natural and safest.

Yes, and that is a very natural alternative.

Compare:

• Он понимает вред этой привычки.
  = He understands the harm of this habit / the harm caused by this habit.

• Он понимает, что эта привычка вредна.
  = He understands that this habit is harmful.

The second version is often more explicit and may sound more natural in everyday speech, because it states the idea directly. The original sentence is still correct and natural, just slightly more noun-based in structure.

Yes, понимает works well here.

The difference is roughly:

• знать = to know, to be aware of a fact
• понимать = to understand, to grasp the meaning or significance

So:

• Он знает о вреде этой привычки = He knows about the harm of this habit.
• Он понимает вред этой привычки = He understands the harm of this habit.

Понимать suggests deeper comprehension, not just possession of information.

A helpful stress guide is:

• Он
• понима́ет
• вред
• э́той
• привы́чки

So the stressed syllables are:

• понима́ет
• э́той
• привы́чки

A rough pronunciation guide for English speakers:

• Он ≈ on
• понима́ет ≈ pa-ni-MA-yet
• вред ≈ vryet / vret
• э́той ≈ EH-tay
• привы́чки ≈ pre-VIHCH-kee

The exact sounds are not identical to English, but those approximations can help at first.

Not always.

Russian often drops subject pronouns when the verb form already makes the subject clear. So:

• Понимает вред этой привычки.

can work in context, especially in conversation or narrative.

But он is included when you want to:

• make the subject explicit
• create contrast
• avoid ambiguity
• sound more complete out of context

As a standalone learning sentence, including он is perfectly normal.