Law is often tri-state. For instance, at one time it was not legal to sell property to black people in certain neighborhoods in the US, because of legally binding covenants. This is the first state: prohibited.
The law was changed so that such covenants were not enforceable. However, that didn't mean black people could actually buy property in those neighborhoods. The property owners were still free to refuse to sell to black people. This is the second state: not prohibited.
The law was again changed, so that discrimination in real estate on the basis of race was illegal, and a seller could get in trouble if the seller used race to decide who to sell to. This is the third state: protected.