You get full exp for every party member that is up to 10 levels below you or 5 levels above you. You get gimped exp for every party member that is between 5 and 10 levels above you. You get no exp if any party member is more than 10 levels above you.

So for example.

I have a party for four people. One Lv20, one Lv24, and two Lv27s.
The Lv24s and Lv27 will get full exp.
The Lv20 will only get some fraction of their expected exp, because the Lv27s are more than 5 levels above them.

I don't know what they were thinking when they implemented this system.

I haven't tested this in a while, so I may be 100% wrong about this. The exp system has gone through several iterations, but I think this is how it works...? Someone please correct me if this is incorrect.