It does not say that. What it says is that if the space opposite the live parts is, in fact, a wall, and if that wall is not "grounded," then you can call that layout a "Condition 1" situation, thus reducing the minimum working clearance to 3 feet. You can also call it a "Condition 1" if there were live parts sitting opposite one another, if both are effectively insulated, but you only have one service MCC, so that part does not apply to your situation.
) that if a person were to have on rubber boots and were standing on a rubber mat, and if one hand were on the sheetrock wall and the other hand touched a live part, there would be current flowing through the person, into planet Earth, and back to the source via the ground rod, and I think the sheetrock wall would sucessfully act as a portion of that current path. The items listed under Condition 2 are not intended to be an all-inclusive set.