Are there limits to it? Are there other procedures for punishing diplomats who break laws?
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The guest country apply to the host country for the diplomats they want to send to get diplomatic immunity. This is usually granted without any objections. With this diplomatic immunity the host country have promised to not touch the diplomat in any way. So no arrests, no traffic stops, no searches, etc. There are usually limits but they might not be spelled out. For example police may chose to violate the diplomatic immunity of a guest diplomat in order to save someones life. And it is not uncommon for certain military guards to get instructions for how to deal with diplomats depending on what they are guarding.
In some cases diplomats do end up committing crimes. Lesser crimes tends to be ignored. However even parking tickets may rack up millions of dollars and become a problem. Although murders does also happen from time to time. Diplomatic immunity does still apply but the host country who issues the diplomatic immunity can retract it so the diplomat have to leave or they may use other diplomatic means to make sure the diplomats who commit the crimes are punished. Unless the crime have been ordered by the guests country or it is used as part of a diplomatic conflict or show of force the guest country usually wants the criminals to face justice just as much as the host country. But exactly how this is done is down to diplomatic negotiations between the countries.
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