It's such a pity that he can't realize his potential because of a bad relationship between he and his teacher!
ご質問ありがとうございます。
"It's such a pity"=「それは本当に残念だ」
"that he can't realize his potential"=「彼が(自分の)力を発揮できないとは」
"because of a bad relationship between he and his teacher!"=「彼の先生との悪い関係によって。」
(又は、"because of human relationships!")
ご参考に。
It's such a waste that they can't reach their potential because of relationships.
It's such a waste that they can't reach their potential because of relationships. 「人間関係のせいで彼らが力を発揮できないなんて本当にもったいない。」
waste: 「無駄」という意味です。何かが無駄にされている時に使われます。
reach their potential: 「力を発揮する」です。この場合の potential は「潜在能力」を意味し、能力を最大限に引き出すことを表します。
because of: 理由を示すフレーズで、「〜のせいで」という意味があります。