All:
I live in Florida where right now, it is exremely muggy. The house AC produces a lot of condensation that is currently wasted. If I were to capture that water, is it suitable to drink or more likely, suitable for watering grass/plants?
I would not drink it. But you could use it for plants.
It’s as clean as the surface it condenses on. Think of the outside of your glass filled with nice cold ice tea. But an air conditioner evaporator is probably not something you would want to lick.
It can certainly could be used for any other purpose, including watering plants.