If Vladmir's passive stack.....

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Yes. That is why is doesn't, he would only need one AP rune or a health mastery and he would gain infinite bonus health and AP.

Not really. 1 AP would give him 1.4 hp which would give him .035 AP. It would rapidly approach a limit. However, if it did stack he would still gain much more hp and AP than currently (for example, 100 AP would give him 140 hp which would give him 3.5 AP).

Also, it could cause problems if the system tried to calculate the exact infinite gain.