With someone's help, I figured out the approach.
After CostFinalize action, before InstallValidate action, add a customer
action, say UpdateFeatureChange, which changes the feature's reqire state
accordingly.
In DTF, it is as simple as 
FeatureInfo featureA2= this.Session.Features["FeatureA2"];
featureA2.RequestState = InstallState.Absent; // Or
Local/Source/Advertise... according to other conditions
The DTF is using MsiSetFeatureState API to set the state.
The condition is complex, because I need to handle different scenarios like
repair/change/update/uninstall.
However, this is a workable approach.

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