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I encountered the condition "Only etching is demonstrated in exactly three rooms."

How would you interpret that?

At first I thought it was "if something is in three rooms, then it must be etching (3rooms --> etching)." But then the explanation in the book suggested that it is saying "Etching is in exactly three rooms." I don't think the book is completely valid in suggesting that etching is in 3 rooms based on the above conditional; instead, I think "Etching and only etching is in exactly three rooms" would be more accurate. The book is called Ace the LSAT Logic Games, and it was recommended by TLS1776 as supplementary material. The games are great because some of them can be tough, but they're not official LSAC games.

Can someone clarify how they would--and how the LSAC would presumably-- interpret the above conditional?

I agree with your first reaction. The wording is pretty ambiguous. That wouldn't appear on an lsac game.

i liked this book alot. the weird way the rules are expressed in ACE i thought really helped me with game 4 on the june 15 lsat. plus the games generally are harder that pretty much anything you will see in on a recent LSAT