In a two-state model of protein folding, the protein can occupy only one of two states: the unfolded state or the folded state. Here, folding is considered as an all-or-none process. Part of the explanation for why folding often follows the two-state model is the cooperativity of protein folding. If folding is highly cooperative, disrupting one interaction in the protein will destabilize all other interactions, so the protein can never be partly folded, only fully folded or fully unfolded.
Other models of protein folding include folding intermediates giving a third state (or more states) that a protein can occupy. The existence of an intermediate state between the folded state and the unfolded state will broaden the transition folded and unfolded protein when looking at the unfolding of a protein.