This condition checks if a particle has collisions with a set of 3D layers.
The accepted 3D layers are "hard" geometries, that have triangles (except for FBX files or mesh deformed by a 3D modifier).
A particle won't collide with lines or points.
This condition can trigger any action (colorize particles, etc.), but it is intrinsically linked to
Make a particle collide with an object, defining its restitution and friction with the surface
(which will make the particle bounce of a surface, as its name indicates).
Here is a small tutorial that will show you how to make a particle collide with a primitive geometry of Smode :