Bad positioning of lyrics when condensing

(Replying to myself to add screenshot of current state of Dorico attempt described above.)

Is it going to be possible to adjust lyrics in condensed staves in the future?

Unless you need to see both condensed and uncondensed vocal staves for this same flow in the same project, I would recommend writing this manually (i.e. two staves, two voices per staff, separate lyrics per voice input separately) so you have maximum flexibility at your end.