One of the most typical use cases for notification is when status is transitioning from A to B, say "Open" to "In Progress".
The screenshot below demonstrates how to achieve it:
Note, that you can specify one or more "source"/"target" statuses or any status by picking "Any status".
The notification will be processed if the actual issue status is transitioned from A to B and
1) A is in statuses list specified in FROM and B is in statuses list specified in TO.
2) A is in statuses list specified in FROM and TO is Any Status
3) FROM is Any Status and B is in statuses list specified in TO
You can also specify Project(s) to which this notification should be applicable as well as Issue type(s). When more fine-grained control needed you can also provide a JQL rule that the issue must match against.