This passage involves two changes. The first deals with the word order. The original manuscript reads, “state of awful woundedness”, which Oliver Cowdery initially copied into 𝓟 as “awful state of woundedness”, but then he immediately corrected the word order to “state of awful woundedness”, making 𝓟 agree with 𝓞. The 1830 edition followed the original reading. But in his editing of 𝓟 for the 1837 edition, Joseph Smith restored the initial order found in 𝓟 and then replaced the word woundedness with blindness—that is, “awful state of blindness”. This reading has been retained in all subsequent editions of the Book of Mormon.
Let us first consider the question of word order. Elsewhere in the text there are seven clauses where the adjective awful modifies state, of which one (Ether 4:15) has the same form as the current text for 1 Nephi 13:32 (except for the word wickedness):
Thus the secondary word order in 1 Nephi 13:32 will work; awful can modify state.
On the other hand, there are four cases with the other word order (the original order in 1 Nephi 13:32), and for three of these the phraseology is “state of awful wickedness”:
Thus the original order “state of awful X” is supported four times in the text, while the secondary order “awful state of X” is supported once (in Ether 4:15).
These examples suggest that 1 Nephi 13:32 may actually be referring to a state of wickedness rather than woundedness. Scribe 2 of 𝓞 wrote down woundedness, which is visually similar to wickedness (both begin with w and end with edness). But since the error is probably not an auditory one, it is quite possible that Joseph Smith himself misread the word to his scribe (instead of the scribe mishearing it). Elsewhere the Book of Mormon never refers to a “state of woundedness” (in fact, there are no other examples of the word woundedness in the text). But the preceding examples show that there are four references to a “state of wickedness” and that in each case the word awful occurs with the expression. The only substantive difference with 1 Nephi 13:32 is the word woundedness.
Also note that here in 1 Nephi 13:32 the demonstrative that (“in that state of awful … ”) refers the reader back to an already mentioned state of the Gentiles, namely:
The last clause in verse 29 describes a state of wickedness, although it doesn’t explicitly say so. The passage refers to people stumbling, as if in darkness, which might have been the reason Joseph Smith later edited the word woundedness to blindness in verse 32. The word woundedness did not seem right.
Textually there is clear evidence linking spiritual blindness with wickedness. In fact, one of the passages that refer to a “state of wickedness” makes this connection:
Thus the earlier reference in 1 Nephi 13:29 can be considered a state of wickedness.
Summary: Emend 1 Nephi 13:32 by replacing the word woundedness with the visually similar wickedness; Joseph Smith may have accidentally misread wickedness as woundedness, thus creating a rather implausible reading for this verse; the original word order “state of awful” (which is more frequent in the text) should be restored.