This mod increases the minimum distance a Settler has to be from existing settlements from 2 to 3.
Effectively this means a Settler cannot create a new Vassal Capital too close to existing Capitals/Vassals/Towns. Whenever that happens in Millennia, it just severely weakens both the new Vassal, and the old Vassal/Region. This also helps reduce cases of the AI awkwardly settling in between your Regions, or pointlessly hampering their own growth.
This mod also strongly discourage the AI from placing a new capital directly contacting existing borders, instead leaving one buffer tile. It also reverses a hidden modifier that makes higher difficulty AI settle closer to other player's Settlements.
Since this mod will tend to increase the distance between Capitals and Towns, consider combining it with a mod that increases the reach of Roads, such as:
https://steamcommunity.com/sharedfiles/filedetails/?id=3316325889
If 3 tiles is not enough for you, try the 4 tiles version:
https://steamcommunity.com/sharedfiles/filedetails/?id=3318540127
5 tiles:
https://steamcommunity.com/sharedfiles/filedetails/?id=3323133417
6 tiles:
https://steamcommunity.com/sharedfiles/filedetails/?id=3323134001