I have tried messing around with the conditions, and I am concluding that the Sitecore Forms conditional logic is weird.
1. Logic
The conditional logic seems to be based on the following
- All Condition are evaluated and applied in sequence.
- Foreach condition, if the Condition matches, then apply selected action. Else, apply inverse of selected action.
2. Example
2.1. Setting
To explain how it works, lets use your scenario. For your scenario, it can work with the following setting

2.2. Explanation
2.2.1. Dropdown Selection: Empty
- Condition 1 Evaluation = False. Inverse selected action (Hide section1 and section2)
- Condition 2 Evaluation = True. Apply selected action (Hide section1)
Results: Hide both section1 and section2
2.2.2. Dropdown Selection: 1
- Condition 1 Evaluation = False. Inverse selected action (Hide section1 and section2)
- Condition 2 Evaluation = False. Inverse selected action (Show section1)
Results: Show section1 and hide section2
2.2.3. Dropdown Selection: 2
- Condition 1 Evaluation = True. Apply selected action (Show section1 and section2)
- Condition 2 Evaluation = False. Inverse selected action (Show section1)
Results: Show both section1 and section2