This is reported speech rather than a conditional. We use 'if' in these structures for reporting yes/no questions. I asked them if they wanted to eat. [not certain - yes/no question] I asked them when they wanted to eat. [certain - information question] So if we know that the thing is certain to happen, we use when rather than if. I asked them to let me know when it was ready. [it will definitely happen - when = at the time that] I asked them to let me know if one becomes available. [it may or may not happen] What does it mean if I say: I asked them to let me know when it will be ready.

How to distinguish between a conditional sentence and indirect speech if "if" and "when" can be used in both cases?

A parent might say to her child "I will be happy when you find the person you want to marry". Of course the mother cannot not possibly know whether or not that person will ever be found, but she doesn't want to draw attention to that fact. It is good to use "when" in place of "if", when you do not want to emphasize conditionality.

There is nothing conditional about it since the person gives clear instructions: "Tell me when it's ready". However, the issue is not so important because the future is always unknowable. You can say "I asked them to let me know when it is ready" even if you knew that it might never be ready. Depending on the nature of the situation, you may or may not have wanted to openly admit the possibility that it might never be ready. If you wanted to admit that possibility, you could say "I asked them to let me know when, if ever, it would be ready"