To add on, both diesel and propane are hydrocarbons (hydrogen and carbon chains). Both combine with oxygen to create heat, carbon dioxide and water. So if you burn either in a room, you will have condensation in the room (plus you might suffocate when the oxygen is used up, and you might get carbon monoxide poisoning as well). If you burn it through an isolated air flow outside the room and the heat is transferred through a heat exchanger, then your room will get warm without condensation (or suffocation), as the reaction above takes place outside the room.
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