The narrative that Japan was about to surrender is a nice story, but has no factual basis. The entire Japanese political structure was where the Japanese political structure had been since 1935. A all powerful military junta ruled, with lip service given to a emperor. The emperor sent out feelers for peace, but the military junta (which could and would dissolve the government if anything they did not approve of was adopted) would not stand for it.

There's been some effort to recast the official Japanese response to the Potsdam declaring (黙殺) as ignoring instead of "be silent with contempt" - but the modern historical view was that Japan had used 黙殺 in the context that it was intended, and intended to ignore any further calls for surrender.

In terms of unconditional surrender - the Allies had agreed on that standard because of the end of World War 1. The conditional nature of the end of that war led to the "stabbed in the back" myth that Hitler rode to power