I agree that it's not articulated well, but I think Adherennium Plotting something's explanation makes sense. Situation= environment, things that are out of the character's control. Condition= personality, decisions, response to that environment. As we build our stories, that "condition" is what really matters, because something is going to change about it by the end.

Ultimately, that may or may not be what she means, but don't get hung up on it. Keep moving.

Cheers,
Michelle