Formatting custom lists is the most difficult exercise in Writer. A list item is defined as a paragraph associated with a sequence counter.
As a paragraph, the item is formatted with a paragraph style, nearly as usual. The “nearly” means you must not set the indents in the paragraph style, even the right indent (the right paragraph “margin”).
The sequence counter is defined by a so-called list style. Several are provided off-the-shelf (numeric, Roman numeric, alphabetic, etc.). The sequence may be reduced to a set of bullets (no incrementation) but is usually incrementting (numeric or alphabetic). The counter is also multi-level, e.g. 1. 2. 3. at first level and 1.1. 1.2. 2.1. 3.1. 3.2. 3.3. at second level, etc. up to level 10. The list style formatting properties take care of the sequence number/bullet layout and appearance and take over the paragraph left indent. A strange limitation prevents you from changing the right indent (fixed at 0 otherwise you get a real mess).
A fully customised list is then formatted by a paragraph style which has been associated with a list style in the Outline & Numbering attributes. You only need to restart numbering when you begin another list instance. This is the most automatic usage of the feature.
A lighter but more manual method is also possible, but I don’t recommend it in a complex and elaborate document maintained over versions and years because you have less specific control over your text.
Any existing paragraph can be converted into a list item without styling it with a dedicated style. You just apply the list attribute with a tool bar button. You retain the base formatting of the paragraph and you add numbering or bullet with the button. The applied list style is the default one which you can customise with Format>Bullets & Numbering. Beware! Modifications will apply to all items formatted like this while you probably needed several different lists.
This method is akin to direct formatting, i.e. formatting without styles, directly from buttons or keyboard shortcuts, which causes insurmountable problems in the long run. It may be acceptable for short one-shot documents but must absolutely be avoided for maintained documents.
From the description above, you can deduce that a list “identity” is defined by the list style. You can of course insert sequentially several distinct occurrences pertaining to the same list (e.g. 1 2 3 then after restarting the counter 1 2). The same counter may be associated with several paragraph styles if you need formatting variants (an example of this is the Heading n family where the various levels have different font sizes – but Heading n is very special since Writer automatically sets the list level according to the Heading n name).
As long as you don’t need two similar independent sequences simultaneously (interleaved or nested lists), the built-in list styles suffice. Otherwise you must “duplicate” the counter and allocate each paragraph style its own list style (the use case is 1(A) 2(A) 1(B) 3(A) 2(B) etc. – I used A and B to disambiguate the item ownership; I don’t know if this makes sense in practice but it is possible).
Regarding the conditional attribute of the style, either you have enabled it inadvertently or you derived your paragraph style from an already conditional style such as Text Body. Conditional styles are an attempt to provide a “one size fits all” feature where a single style is mapped over several specialised others selected according to context. It is supposed to be user-friendly (only one or a few styles to use) but it is quite difficult to set it right. Moreover, once a style is conditional, you can no longer alter this setting.
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