The default state is the state that your campaign is reverted to when none of your conditions are met (when no filters are ‘active’). It is effectively the ‘else’ part in the conditional statement ‘if this then than, else’. The default state should correspond to the actions that you selected in the previous step.
Your first filter is set to turn on the ‘rain’ ad when it’s raining, and the second filter is set to turn on the ‘snow’ ad when it’s snowing. So what happens when it’s clear? You could turn on your ‘generic’ ad, or alternatively you could pause delivery entirely by switching off your ad set, or even your campaign.
Note: For automation flows where there are only 2 available actions (such as DV360 automations and the Facebook Multi-Location Automation flow), your default state will be predetermined by your choice of action.