Thank you Charlieface, for the query, you gave me what I wanted. I altered a bit to get the results I wanted. I have to test this further, and this is just the part of the problem. I will have to check this with entire query and test it. This is just 1 code, in reality there are 5 types of code in table t1 with individual include and exclude conditions in ranges for each of the codes. I believe this is what I wanted:
SELECT *
FROM table1 t1
Left Join table2 t2_x on t1.Code between t2_x.FromCode and t2_x.ToCode and t2_x.IsExcluded = 1
WHERE t2_x.ID is NULL
AND NOT EXISTS (SELECT 1
FROM table2 t2
WHERE t2.IsExcluded = 0)
UNION ALL
SELECT *
FROM table1 t1
WHERE EXISTS (SELECT 1
FROM table2 t2
WHERE t1.Code BETWEEN t2.FromCode AND t2.ToCode
AND t2.IsExcluded = 0)
AND NOT EXISTS (SELECT 1
FROM table2 t2_x
WHERE t1.Code BETWEEN t2_x.FromCode AND t2_x.ToCode
AND t2_x.IsExcluded = 1);