The documentation states:
If the timeout period expires, the action will continue and the value placed in the indicated text variable will be, Not Set.
In VoiceAttack "Not Set" represents NULL, which essentially means the variable has not been initialized and doesn't exist; For a string, this is not the same as ""(blank), which means the variable has been initialized and exists, but contains no character data.
If you're comparing text to text, you'd have to compare to a literal "Not Set", E.G.
Begin Text Compare : [~VAR] Equals 'Not Set'
End Condition
However, you can also check whether the variable has been set or not:
Begin Text Compare : [~VAR] Has Not Been Set
End Condition
Which is the preferable option(as the first example will also match "Not Set" if you were to manually set the variable to that string).