jedinger
First off, thanks for reaching out and choosing Office ProPlus we're working hard to make it easier to manage for the IT Admin. I looked over you XML and the MSICondition Product Codes look like Click-to-Run Product ID's and not MSI Product Codes from my original post and example
<Product ID="ProjectProRetail" MSICondition="PrjPro,PrjProR">
In addition, your LanguageID attribute has repeated MatchPreviousMSI and The PIDKEY attribute does not include the KMS key.(This might be because you removed if using a MAK key and didn't want to share with the world) NOTE: If using a KMS key the default GVLK is the same for every customer the unique key for each customer is the KMS Host key that will activate your KMS host. In order to identify the MSI Product Code you can use ROIScan and look for ConfigProductName. There are also a lot of other ways to find out your MSI Product Code available on a web search.
In closing, to answer your main question MSI Condition was designed to dynamically match the installed MSI version with a Click-to-Run based version. In your scenario I think it's the MSICondition Product codes not being correct and defaulting to install the specified Product ID's only.