Correct. If the model is hit, they get the condition. What was confusing me was the timing,; when does the model actually get the condition?
Ok, found it .
In the FAQ (and in the new rule book), conditions are given to the model after the Grit check for a successful hit. pg 25, Rate of Fire - "Apply any effects (such as conditions or qualities) after each Grit check as they occur until all remaining Grit checks have been resolved...."
So timing is: enemy targets my model. Figure out dice and mods to the roll. Enemy rolls to hit. The attack hits. My model determines any mods to Grit. Make Grit check. My model gains condition (like Stun).
So, if I am hit with 2 successful hits with a weapon with Stun, the Grit check from the first hit does not get the -1 attribute penalty from Stun because the Stun condition is applied after the Grit check. But when resolving the second hit, the second hit becomes Lethal, because I gained the Stunned condition from the first hit.