> However, maintaining lawful status in a dual intent nonimmigrant category is not sufficient, on its own, to warrant a favorable exercise of discretion.

Which basically means that, applying AOS while being in dual-intent category is not favorable and you will have to prove extraordinary circumstance for a simple i-485 AOS on H1B. Lacking the extraordinary circumstance, your application may be denied.

What this basically means for millions of people on H1B (especially from countries like India is), they have to go for consular processing. And given the lack of appointments in India and delays they are facing - you could be stuck for months to years and no company is going to wait for you while you go through the process. So leaving would definitely disqualify them.