1.) If there is a red triangle containing the letters “MC” in the Temptation square of the Characteristics matrix, then doesn’t that mean that the MC has the characteristic of Temptation?
2.) If the MC Solution = Temptation, doesn’t that mean that the MC does not have the characteristic “Temptation”?
My story form has both 1 and 2. I don’t know how to interpret this. Help, please.
Here is my understanding. Take it with a grain of salt.
My Answer for #1
Characters in a story don’t “have” elements, per se, but instead “use” elements. The characteristics matrix that you refer to is a collection of the elements used by various OS characters. So, that mark means that whenever your main character (notice, not capitalized) is acting as an OS player/character, the character will represent Temptation. This is separate from, though related to, the Main Character Throughline.
My Answer for #2
A Main Character actually has/uses all 64 elements throughout the story. What a MC Solution of Temptation actually means isn’t that the MC doesn’t have/use Temptation. Instead, it means that whenever the MC does use Temptation, whatever is truly bogging them down (for Changed) or truly driving them forward (for Steadfast) looses much of that effect. In this case, that problem/drive is Conscience, so whenever the MC uses Temptation, the effects on the MC of something having to do with Conscience are quelled. [Edited: Conscience (dynamic pair with Temptation) instead of Conscious]
Summary
So, you’re character has/uses Temptation. What it means for this to happen, and the effects we see within the story will change based on which throughline (MC or OS) this is happening in.
@Hunter 's answer is totally on the money (except for a couple typos, I think you meant Conscience not Conscious, Hunter. 
)
The important part is keeping the MC’s role in the MC throughline separate from their OS role.
Also, is this a Failure story? I think that red triangle is denoting that the MC Crucial Element is Temptation. You may want to read up a bit on the Crucial Element:
Definitely did. Fixed the original post for future readers.