The word, "humility" comes from the word, "Humus" which is basically means earth in Latin. It really boils down to not having castles in the air.

He then we now describe, must be brave and valiant in the Field, and amongst the first to face the enemy; but elsewhere humble, modest, and reserved, ever avoiding Ostentation, and an imprudent praising of himself, for by such indiscreet Conduct, a Man ever gains the Odium of those who hear him.

And I, for my part, said Signor Gaspar, have known few Men excellent in anything whatsoever, but praised themselves. I think we may very well bear with them for doing so, for he who is an able Man in any Art, when he finds his Productions unknown or undervalued by the ignorant, is vexed with a kind of Disdain, and is therefore constrained some how to discover it, that he might not be defrauded of the Honour which is his due, and which is the true Reward of virtuous Labours.

For which Reason, amongst ancient Writers, he that is most excellent, seldom fails to praise himself; indeed, those who praise themselves, and have no manner of Merit, are Wretches not to be born withal, but such a one we will not suppose our Courtier to be.

Sir, says the Count, had you well understood my Meaning, you would not have given yourself this Trouble, for I only blamed the imprudent Praising of one’s self, without any Regard of Distinction of Merit: For undoubtedly, as you say, a Man ought not to entertain an ill Opinion of an able Person, that praises himself with Discretion, but rather, take it for a more certain Testimony, than if it came out of another Man’s Mouth. I agree, that he who, in praising himself, commits no Error, nor gets himself the Disesteem of his Hearers, is most discreet, and who, besides the Encomiums he gives himself, deserves the fame of others; but this is no easy Task to manage.

This, says Signor Gaspar, you must instruct us in.

Among te Ancient Writers, says the Count, there have not been wanting those who have taught it; but in my Opinion, the whole consists in telling things after such a Manner, that it may appear, as if they are not spoken for that Purpose, but, as if the Subject necessarily required it, always seeming careful to avoid speaking in his own Praise: Not like those who throw out Words at a venture, they don’t care how, as not long since, one of this Company, who was run through the Thigh at Pisa, said, he only took it for the bit of a Fly; and another said, he had no looking Glass in his Chamber, for when he was angry, he looked so terrible, that he was afraid to see himself in the Glass, for Fear of being frighted.

At this, they all fell a laughing; upon which Signor Cesar Gongaza asked them, what they laughed at? Don’t you know, that Alexander the Great, upon hearing the Opinion of a certain Philosopher, that there were infinite Worlds, fell a weeping; and when he was asked the Reason, answered, because he had not conquered one, yet as though he had a Mind to be Master of them all; And don’t you think this was a greater Bravado, than to speak of the Bite of a Fly?
And Alexander was a greater Person than he that spoke it, says the Count; but in reality, continued he, excellent Men are to be excused when they take a little upon them, for he that undertakes great things must have a Soul to do them, and a Confidence of himself, and must not have a poor, vile, and abject Spirit; but yet, should be very modest in Expression, to shew that he presumes less on his own Abilities, than in reality he does, provided such Presumption does not extend to Temerity and Rashness.

Quote

And Alexander was a greater Person than he that spoke it, says the Count; but in reality, continued he, excellent Men are to be excused when they take a little upon them, for he that undertakes great things must have a Soul to do them, and a Confidence of himself, and must not have a poor, vile, and abject Spirit; but yet, should be very modest in Expression, to shew that he presumes less on his own Abilities, than in reality he does, provided such Presumption does not extend to Temerity and Rashness.

So he is saying that modesty should be feigned in order to please others.

Quote

to shew that he presumes less on his own Abilities, than in reality he does

Why would you want people to think you think less of yourself than you really do, except to flatter them in a dishonest manner?

Our Lord God was born in a stable. I think there are certain times that its not necessary to show your greatness (in His case) / what you're good at (in our case)

The book is advice for courtiers in the 16th C. so practical skill in flattery is discussed. It isn't dishonesty, it's 'good form', courtly manners. He advices inner humility and, outwardly, a realistic concern for appearances balanced by a concern for getting one's due.

I think it's a little misanthropic to call such things dishonest; reminds me of Alceste from the play by Moliere.