How do Protestants interpret Ezekiel 18:20-32? Here is my translation:1

Ezekiel 18:20-32
The soul that sins, the same [only] shall die: the son shall not bear the guilt of the father, nor the father the guilt of the son: the righteousness of the righteous will fall to the righteous, and the wickedness of the wicked to the wicked. 21 And a wicked man who turns away from all he sins which he had comitted, and observes all of my statues, and does righteousness, and judgement, the same shall live: he shall not die. 22 And none of his transgressions shall be remembered or held against him: by his righteousness he shall live.
23 Do I enjoy the death of the wicked, says the Lord God, Would I not rather see him turn from his ways and live? 24 But when a righteous man turns away from his righteousness, and does iniquity, after the manner of the deeds which wicked men are wont to do, shall he do it and live?
25 Yet you say, The way of the Lord is perverse. Listen, O house of Israel! Is my way not right, and your ways perverse rather? 26 When a righteous man turns away from his righteousness, and does iniquity, and he dies therein, the same shall die in his iniquity. 27 Again, when a wicked man turns from the wickedness which he committed, and does judgement, and righteousness, the same shall keep his soul alive: 28 when he examines [himself], and turns back from all his trespasses, he shall live, and shall not die.
29 But the house of Israel say, The ways of the Lord are perverse. Are my ways not right, and your ways perverse rather, O house of Israel? Are not rather your ways perverse?
30 Therefore: I shall judge a man according to his ways, thou house of Israel, says the Lord God. Repent, and turn from all your transgressions, and your sin shall not be an obstacle to you. 31 Cast off from yourselves all of your transgressions wherein you have transgressed, and create for yourselves a new heart, and a new spirit: for what reason would you then die, O house of Israel?
32 For it is not my desire that anyone should die, says the Lord God: turn therefore, and live!

This seems to teach that sin directly corresponds to condemnation, and righteous living directly corresponds to life. However, this would seem to be at odds with the Protestant doctrine of simul justus et peccator (at once a sinner and just[ified]).
Question
How do Protestants interpret this passage?
I would like to anticipate a couple responses:

'Keeping the law perfectly' clearly isn't in view here, since God expects people to be able to keep his statutes in general: it must therefore refer to an attitude of holding them as necessary and as pertaining to justification, even if you fall short (for which repentance is here recommended). In other words, the space given for repentance doesn't make them not necessary for justification.

This is not about capital punishment under the Mosaic Law, but justification—life and death of the soul: &quot;Therefore I [God] will judge you according to your ways.&quot; &quot;A new heart and a new spirit.&quot;2


However, feel free to challenge these.
Thanks in advance.

1 Avoids doctrinally relevant 'surprises' pertaining to translation.
2 This need not be conflated with a later dispensation in the New Covenant era (He's speaking to people in Ezekiel's time, and expecting them to obey) or regeneration proper. In context it simply means here turning your life around.
This passage is about repentance.
Though a soul start ever so badly, he will be fully forgiven immediately upon his repentance; and though a soul start ever so well, he will be rejected if he apostates; and each individual soul is answerable to God directly.
The principle sentence in the question is:

This seems to teach that sin directly corresponds to condemnation, and righteous living directly corresponds to life. However, this would seem to be at odds with the Protestant doctrine of simul justus et peccator (at once a sinner and just[ified]).

The passage is teaching what Protestants believe: in the instant/second/moment someone repents they are fully justified/declared righteous by God.
True repentance is the immediate consequence of true faith: or put another way &quot;faith&quot; and &quot;repentance&quot; are two sides of the same coin.  So, even though the one repenting is a sinner, he immediately becomes fully justified upon his repentance which arises because he believes in the goodness of God, and His offer of full forgiveness upon repentance.  For example, the dying thief being crucified next to Jesus was fully and immediately forgiven upon his faith and repentance (Luke 23:39-43).
We are not justified because of the life that proceeds from our faith, we are justified the second we believe, the second we repent.  However, the evidence that someone has truly believed and truly repented is shown outwardly in the life that follows afterward.  But this life didn't earn forgiveness, it was the repentance and faith which gained them forgiveness as a free gift.  It is because we know that we are fully forgiven that we want to live uprightly and godly for such a loving merciful God.
The godly life that follows is far from perfect, and it does not contribute to our justification.  Justification is a legal term, meaning &quot;to declare innocent&quot;.  In scripture it means not just to declare innocent (which is a neutral position, you don't deserve to be punished) but to declare fully righteous (which is a positively good state, to be as righteous as God). In justification the sinner is declared to be as righteous as God, deserving eternal life in Heaven.  Because the sinner trusts in Jesus everything that belongs to Jesus now is declared to belong to the sinner, (just like in a marriage).  As Martin Luther came to realize we are declared righteous when we believe in Jesus for &quot;the just shall live by faith&quot; (Romans 1:17); meaning, even though I see so much in me that is bad, I believe I am fully forgiven because Christ has paid the full price for all my sins: this faith leads to peace, joy, repentance, and a righteous life, (but not a perfectly sinless life).
I used to walk amongst charismatics but now am reformed baptist and sing a much more reverent style of worship in the congregation: but one charismatic song by Michael Ray sticks in the mindbecause it sums up so much with the right amount of joy for a true believer:
I Get So Excited, Lord,
Every Time I Realise
I’m Forgiven, I’m Forgiven.
Jesus, Lord, You’ve Done It All,
You’ve Paid The Price:
I’m Forgiven, I’m Forgiven.
(Look up the tune too on youtube.)

The joy of the LORD is your strength (Nehemiah 8:10).

It is the joy of being forgiven, because all our sins have been hurled into the depths of the sea (Micah 7:19), all our sins are sent away as far as the east is from the west (Psalm 103:12) upon our faith and repentance (Acts 16:31).  This joy is the spring board for godly living.
For a person to be forgiven they must repent.  If they repent they will be forgiven.  The repentance doesn't earn their forgiveness.. the forgiveness upon repentance is still God's free grace and free pardon.  What earns our pardon is Christ's merit alone.  The repentance that is being spoken of is the repentance of one who trusts that Jesus paid the full price for all their sin, and who believes that God merely asks for repentance... God doesn't ask that all that is done wrong be repaid for by us... we cannot pay it, nor restore all that was ruined, we have nothing to pay (though what we can fix/restore/repay we should).  All He asks is that we turn back to Him asking for forgiveness in Jesus's name, for His sake, and because He died to take all our punishment.
What is not being spoken of here is a perfect repentance or a turning back to perfection... our repentance will always be an imperfect repentance... it cannot earn grace.  Even after this repentance we will still need to pray &quot;Give us today our daily bread and forgive us our trespasses as we forgive...&quot;.  There will still be trespasses needing to be forgiven.
This repentance happens when we realize how fallen, lost, and sinful we are, and cry out to God for his mercy because we know there is nothing else we can do.
A full repentance happens when we come to believe that God is truly merciful and loving.  &quot;How could I have treated such a loving God and heavenly Father so badly as I have done up to now?&quot;  Then we are truly sorry after we know we have been forgiven:

&quot;They shall look upon him whom they have pierced and shall mourn as an only son, and shall be in bitterness for him as one that is in bitterness for [the death of] his firstborn.&quot;  (Zechariah 12:10).

What motivates this repentance is (belief in) the love of God:

We love because he first loved us. (1 John 4:19)

We repent because we believe in his amazing love for us.
&quot;The soul that sins shall die&quot; is a repeat of the warning given to Adam &quot;in the day that you eat of it you shall surely die&quot; (Genesis 2:17).
The sentiment of this passage is repeated in the New Testament:

The wages of sin is death, but the gift of God is eternal life through Jesus Christ our Lord (Romans 6:23).

The Covenant of Works never offered forgiveness upon our repentance: it simply promises death (i.e. eternal punishment) for sin.  When a person repents they already deserve eternal hell because of sin, and nothing they do can change what they deserve.
A promise of forgiveness upon repentance can only be a gracious act of God falling within the terms of the Covenant of Grace.  The only way such a repentance can happen is when a person trusts in the mercy of God as it is offered through the Gospel, upon the merits of the blood if Jesus Christ.  Though that is not mentioned in the passage, what is stressed in the passage is the goodness of God in forgiving a sinner merely upon his repentance... other passages already written, such as Isaiah 53, give the reason why God can show such grace, what is the ground of such mercy without destroying God's justice.
Suppose I said to a grown man and a little child &quot;If you come round to my house and knock on the door I will give you a million pounds.&quot; The grown man scoffs and  says he is not such a fool as to be taken in by that, so he doesn't knock on my door, unbelief stops him being blessed; but the little child believes me and comes round and knocks on my door.  And I give the little child a million pounds.  The child didn't earn a million pounds by coming round, it was a gift: but he still had to believe me and then come.
And so it is with the two things needed for salvation/forgiveness, faith and repentance: we have to believe what God says and then do what He says which is repent/turn back to him from our sinful ways.  But such believing and repenting don't earn our forgiveness, they cannot... salvation is always a free gift of the grace of God. And all we have to do for it is believe and repent: so little to do for so much blessing!