I very much agree that the bonuses/penalties are set up in a very confusing way, and how much more complicated it makes running the game. I get that they are trying to simplify down from Pathfinder 1e's 20+ categories (or even Starfinder's 10 categories plus untyped), but... maybe this particular split isn't quite right.
Specifically, I think it stems from the fact that "conditional" and "circumstance" are practically synonyms of each other. It's almost impossible to tell if any particular effect is going to be considered one over the other. And it doesn't even seem like the design quite agrees with itself!
If I just skim through the rulebook...
1) Conditional seems to include morale effects (barbarian's Rage, bard's Inspire Courage), stances, trained resistances (alchemist's Poison Resistance, monk's Diamond Soul, paladin's Divine Health), luck and divine blessings (Bit of Luck, Bless), and effects caused by conditions (asleep, blinded, deafened, drained, enervated, etc.).
2) Circumstance seems to include... cover, screening, morale effects (cavalier's Cavalier's Banner), racism societal training (dwarf's Ancestral Hatred and Giant Bane), innate/trained resistance (dwarf's Ancient Blood, halfling's Illusion Sense), innate physical abilities (elf's Keen Eyes), training (alchemist's Alchemical Savant), special techniques (fighter's various unique actions), perceptiveness/experience (ranger's Hunt Target, Monster Hunter, etc), and effects caused by conditions (asleep, flat-footed, dispositions, prone, etc.).
So conditions are usually conditional effects, except if they relate to positioning, in which case they are circumstance effects. Being asleep, on the other hand, provides both circumstance and conditional penalties. Most morale-type effects are considered conditional, unless they relate to your disposition or a cavalier's banner (huh?). Experience, practice, or training via your class/ancestry could provide you with either a circumstance or a conditional effect, but there doesn't seem to be much rhyme or reason to which one you'll get.
So... I dunno. I like that there are fewer bonus/penalty categories to worry about, but this just seems to be the wrong split. I imagine the way to fix this would be to split the bonuses into more logical categories, even if they have to add a few more to the list.
Ultimately if I, as a GM, don't know for sure what category a bonus is, I should be able to make an educated guess during play. It's not a perfect suggestion, but maybe something like this could work:
- mental/morale (effects caused by alterations to your mental state--disposition, inspiration, rage, fear, blessings, etc)
- physical (effects caused by alterations to your physical state--poison, enervation, sickness, mutagen and magical enhancements)
- talent (effects based on training, skill, or innate ability--things like Hunt Target, Keen Eyes, etc)
- item (same as now; effects based on the quality or properties of your equipment)
- positional/environmental (effects caused by your positioning or imposed on you by the environment--cover, screening, darkness, flanking, prone, etc)
Obviously, any change to how stacking works would need to take into account how that alters the math and balance of the game, but there has to be a better categorization than what we've currently got.