Basically instead of applying a massive ever increasing diplomatic penalty when you hit some arbitrary # of provinces, Realm Divide penalty should be a gradual factor that increases as you get stronger.
A faction strength or "threat" penalty should exist at all times whenever you engage in diplomacy with someone with LESS ARMY THAN YOU. It has less too do with number of provinces than total army strength. Eventually just having a giant army (say worth a million gold) is going to make everyone else team up against you. But it wouldn't happen all at once.
This way you wouldn't need to worry about taking the 8th province and suddenly finding yourself enemy of the state.
just my 2c.