From New Advent:
According to fundamental option theory, each person makes a deep and basic choice for or against God. Individual acts we perform may or may not be in accordance with that fundamental choice. For example, when a person who has made a basic choice in favor of God sins, this choice to sin is not in accord with his fundamental orientation in favor of God.
The key claims of fundamental option theory are that individual acts do not change our basic orientation and that only when our fundamental option changes against God do we fall out of a state of grace. A person can commit particular sins without losing a state of grace.
Historic Catholic theology would say that those sins which do not change our fundamental option are venial sins and that those sins which do change it are mortal sins. Whenever a person commits a mortal sin, he has changed his fundamental option and chooses to be against God; he loses the state of grace.
But this is not the way fundamental option theorists present their system. They typically claim that one can commit acts such as adultery, homosexuality, and masturbation, which the Church has always regarded as mortal sins, without changing one’s fundamental option. Some go so far as to imply that no single act of sin one commits changes one’s fundamental option; only a prolonged pattern of sinful behavior can do so.
The effect of fundamental option theory, when it is presented this way, is to minimize people’s awareness of mortal sin and the danger it poses to their souls. It was this teaching, which undermines what the Church always has taught concerning sin, that the pope condemned (Veritatis Splendor 65-70).