La pintura de la pared del baño no está en buen estado.

Here, la pintura means the paint / the painted surface / the paintwork, not an artwork.

So in this sentence, la pintura de la pared is the paint on the wall.

Compare:

• una pintura muy famosa = a very famous painting (artwork)
• la pintura de esta pared = the paint on this wall

Spanish pintura can mean both, so context tells you which one is meant.

It is a chain of de phrases:

• la pintura = the paint
• de la pared = of the wall
• del baño = of the bathroom

So literally, the structure is:

the paint of the wall of the bathroom

English often prefers a smoother version such as the paint on the bathroom wall, but Spanish commonly uses de like this.

So:

• la pintura de la pared del baño = the paint on the bathroom wall

Because de + el contracts to del in Spanish.

So:

• de + el = del

Examples:

• el color del coche = the colour of the car
• la puerta del baño = the bathroom door
• la pintura de la pared del baño = the paint of the bathroom wall

One important exception: if El is part of a proper name, it usually does not contract.

• de El Escorial = from El Escorial

But here el baño is just a normal noun phrase, so del is required.

Because the sentence is talking about a condition/state, not an essential identity.

• estar is commonly used for states, conditions, and how something is at the moment
• ser is used more for identity, classification, and inherent characteristics

So:

• no está en buen estado = it is not in good condition

That is a temporary or resulting state, so estar is the natural choice.

Compare:

• La pared está sucia. = The wall is dirty.
• La pared es blanca. = The wall is white.

In your sentence, the paint’s condition is being described, so está is correct.

En buen estado is a very common expression meaning in good condition.

It is an idiomatic phrase:

• estar en buen estado = to be in good condition
• estar en mal estado = to be in bad condition

As for buen: it comes from bueno.

Bueno becomes buen before a masculine singular noun. This shortening is called apocope.

So:

• un buen libro
• buen tiempo
• en buen estado

Because estado is masculine singular, Spanish uses buen estado, not bueno estado.

Spanish uses definite articles more often than English.

In English, we might say:

• Bathroom wall paint or
• The paint on the bathroom wall

In Spanish, it is very normal to specify each noun with an article:

• la pintura
• la pared
• el baño

This sounds natural in Spanish because the speaker is referring to a specific wall and a specific bathroom, not walls or bathrooms in general.

In a simple Spanish sentence, no normally goes directly before the conjugated verb.

So:

• no está = is not

Examples:

• No tengo tiempo. = I don’t have time.
• La puerta no está abierta. = The door is not open.
• La pintura ... no está en buen estado. = The paint ... is not in good condition.

That placement is standard and very common.

Yes, you could, but it changes the focus.

• La pintura de la pared del baño no está en buen estado.
  = The paint on the bathroom wall is not in good condition.

• La pared del baño no está en buen estado.
  = The wall itself is not in good condition.

The second sentence is broader. It could suggest damage to the wall in general, not just the paint. The original sentence is more specific.

Yes. Baño is completely natural and very common in Spain.

You may also hear:

• cuarto de baño = bathroom
• aseo = toilet / restroom / washroom, depending on context

But in this sentence, baño sounds perfectly normal.

So:

• la pared del baño = the bathroom wall

is a very natural phrase in Spain.

Yes. A few common alternatives are:

• La pintura de la pared del baño está en mal estado.
  = The paint on the bathroom wall is in bad condition.

• La pintura de la pared del baño está bastante deteriorada.
  = The paint on the bathroom wall is quite deteriorated.

• La pintura de la pared del baño está desconchada.
  = The paint on the bathroom wall is chipped/peeling.

The original no está en buen estado is a fairly neutral, general way to express the idea. It does not specify exactly what is wrong, only that the condition is not good.

Because pintura is being used as a mass noun or as a collective idea: the paintwork as a whole.

Spanish often uses the singular for substances or materials:

• la pintura = the paint
• el agua = the water
• la madera = the wood

So la pintura de la pared refers to the paint covering that wall in general, not to several separate paints.