Answer
Conditional Formatting isn't controlled by a separate, grantable permission at all — it's baseline functionality bundled into FND_RUNTIME, the permission set that's mandatory for any user to log into the IEE client in the first place. Because it's part of that mandatory baseline set rather than an optional grant, there's no way to selectively remove or hide it for specific users through permission sets; doing so would require an actual change to the framework code, not a permissions change.