I too believe DoDMERB is a completely separate process from the Admissions review. Many are conditionally admitted pending final DoDMERB clearance or wavier being granted.
Getting a DoDMERB notice like shown above is good news, you are moving forward in the process and your file is not lost

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"Conditional" will be a term you continue to hear on your 200 week USCGA journey if you are admitted, for example:
1. You must receive a favorable security clearance adjudication.
2. You must pass the PFE (fitness test) every semester (some remediation is allowed) and must pass it in your final semester to be commissioned.
3. You must pass your commissioning physical 1/c (senior) year, much more thorough than DoDMERB and performed by USCG medical staff.
4. You must pass your academic classes and complete military trainings.
5. You must successfully compete SWAB summer training program.
6. You must not violate the UCMJ (military laws) and pass random drug testing.
7. You must not commit serious honor and conduct violations.
8. Each of your CERs (Cadet Evaluation Reports) must be marked "Ready" or "Distinction" each semester for each position you hold. If marked "Suitability Review" your performance has not met standards and you go before a board for further review.
If going to flight school, conditional starts all over again after you graduate, ie Flight Physical, successfully complete multiple flight trainings, etc.
Part of what makes the military academies so selective is very few High School Graduates can successfully navigate all these "conditions".
Point being, don't get hung up on conditional appointments, everyone has some conditional aspect of their appointment, life is conditional.
Congratulations on moving one step closer in the process and good luck!