This conversation will definitely have people for or against TBO. Bottom line and depending where you live and what type of aircraft makes the choice either up to you or by your regulatory authority.
I have friends and seen many over the years with 3K - 4K hours. There are engines all around the world that have more than 2K hours. If you do the normal prescribed maintenance and don't do bad things to it then it should last.
If things start to go bad and you're doing your duty as a mechanic then there are signs when things are't going well or starting to fail. Even all the "O" rings. They have symptoms i.e. leaking whether it's oil, fuel or air you should see these things if you're doing a good and proper inspection.
So every Rotax engine I have ever worked on I ALWAYS use the checklist out of the Line Maint. manual. This checklist and an airframe checklist goes to the customer. I fill it out and sign everything off. If I touch, tweak, torque or change something (i.e. plugs or oil, ect..) I annotate it in the margins. Plus some of the things they say only need to be done at 200 hours I do them anyway because I want to see trends or issues someone else missed which unfortunately happens way too often because people don't use checklist or they try and change something on the engine and think their smarter than Rotax. I do this for the engine and fuselage. I do an oil sample at each annual. Change the oil on a good regular interval. This is like the blood in your body. Disease it and you won't have a good life or die early. The electronics on the engine is like your nervous system in your body. Damage that and life isn't good.
So do the prescribed things and don't take shortcuts. Don't use aftermarket parts.
So an "on condition" inspection as any inspection in the engine's life should follow the maint. checklist. If everything is good, you kept the carbs synced, did oil analysis and everything always looks good at each annual then I have no issues with on condition.
Bottom line is always be thorough. It's your life and your money.