The violet curve shows the environmental temperatures as a function of
altitude. The other curve the temperature of a rising parcel of
moist air. The rising parcel starts out unsaturated and follows
the green portion of the curve. Once it becomes saturated it
begins cooling at the moist rate and follows the orange line.
The top figure shows a conditionally unstable situation. Because
the parcel is lifted above the Level of Free Convection (LFC) it is
able to continue rising on its own and develops into cumuliform cloud
(perhaps a thunderstorm).
The air in the lifted parcel does become saturated but never becomes
warmer than the surrounding air. The parcel won't go any higher
than it is lifted. Stratiform clouds tend to form under these
conditions.