When editing a design state, an object state can be explicitly excluded by clicking on the checkbox next to that object state in the design state definition until a red "X" appears (see example depicted below). For objects with mutually-exclusive states, when the Analyst specifies that an object state is included in a design state, all other states associated with that object will be automatically marked as explicitly excluded (to remove the red "X", the Analyst must clear the state setting).
When one or more states are explicitly excluded from a design state, then object states that are only upstream from excluded states cannot be either included or excluded from that design state. In the example depicted above, the state "Use Input From C" (on object D) has been excluded from the selected design state. Because a signal out of object B has no way of propagating through the system other than through the excluded state on D, the states on object B are considered non-selectable for this design state (this is indicated by the gray "X' that appears to the left of each of these state settings, rather than a checkbox).
When multiple design states are selected within a test definition, an object state will only be considered to be enabled for that test if it is marked as included for at least one selected design state and not explicitly excluded from any of the selected design states.
Note: When a design state is generated automatically, non-included object state settings are only marked as explicitly excluded when the "Explicitly Exclude Non-Included States" checkbox is enabled on the Auto-Create Design States dialog.