What does this mean: modified or unmodified?

You are modifying a piece of (open source) software if you expand, reduce or modify at least one of the received software files, and - in case of dealing with binary object code - if you (re)compile and (re)link the modified software to a new binary file [modified]. But if you use / distribute the software as you have got it, you do not modify it [unmodified]. 

Note: if you only modify some of the configuration files, you are not modifying the open source software itself.