What are all the conditions for active emergency stop assist to work? Should the vehicle be on DISTRONIC with a set speed + Active steering assist switched on? Or will it work without a set speed on DISTRONIC and just in ON state?

And what happens if the driver takes his hands off the steering wheel with just Active lane keep assist ?

what year and model car

Its a 2022 AMG A35

Ummm..."if the driver takes his hands off the steering wheel"...really???

Yeah that’s when the active emergency stop assist is triggered.

You seem to be confusing two different systems. The active emergency braking aka collision avoidance doesn't have any conditions to be active, other than the system detecting a possible imminent collision. The system is always active and warns or intervenes when a collision is imminent. Active lane keep assist is a different story. If you start drifting out of your lane across a solid lane marker it will selectively apply the inner brakes to pull the car back into its lane. This can feel like active emergency braking, because it's using the brakes, but it's not. This is simply MB's implementation to pull the car back into its lane by applying the brakes on one side of the car. Other implementations use the steering wheel to steer the car back into its lane. I don't know why MB chose this approach, but it does have the side effect of jolting the driver awake if they have fallen asleep, whereas other systems won't wake up a sleeping driver that is drifting around in their lane.

Emergency stops are used to lessen the impact, not prevent it. This makes extreme accidents become survivable.
This is triggered by front radars in addition to stereoscopic cameras.

This has saved me three times already!
1-- A driver stopped unexpectedly and my car just kissed his bumper

2-3-- I got rear ended in two instances at traffic light. My bumper is nearly un scratched instead of MB totalled plus hospital bills.

Lane assist with side braking can be a pain except one time my 2014 car autonomously "escaped" its own lane when other driver drifted into my lane. I was both surprised and very pleased when I realized what had just happened there.

Car saved itself thanks to BOSCH firmware available in most cars worlwide including premium Japanese brands.

DistronicPlus is an engine speed control augmented with front distance control and independent self-steering with stereo camera. It works great on open roads or in traffic stop and go crawl. It manages brakes, throttle and steering.
The ability to follow car on the front is convenient and safe.