Unclear situation in neutral region (4,4)
I believe the answer is:
grey area
'unclear situation' is the definition.
(a morally or legally unclear situation)
'neutral region' is the wordplay.
'neutral' becomes 'grey' (greys are neutral colours).
'region' becomes 'area' (synonyms).
'grey'+'area'='GREY AREA'
'in' is the link.
(Other definitions for grey area that I've seen before include "doubtful situation" , "where work is inadequate" , "Woolly matter" , "Retirement village" , "something hard to define" .)