Hi @David Tan
I appreciate your conciliatory tone, and I'm sorry if my earlier post appeared harsh, but some things are not merely "simpler" or "easier", but just wrong. "3 states of matter" is a simplification; if we were told dogmatically that these were the only states, and there were definitely no others, that would be a falsehood. "K = 1 at equilibrium" is not a simplification, but (except coincidentally, when ΔG° ≈ 0) is just plain false. The OP is being confused by being taught wrong things, whether by mistake or for the sake of "simplicity".
The key point to grasp is that the quantity that is equal to -RTlnK is not the quantity that is equal to 0 at equilibrium. Calling them both "ΔG" is asking for trouble, and confusion persists through university studies, as many posts on these forums will show. K, and ΔG°, are constants for a given temperature, irrespective of the state of any particular system. Q and ΔG for a system vary with the state of the system, and at equilibrium Q = K and ΔG = 0. I realise that these points are not always made as clear as they should be, even at university, but until they are understood there will always be confusion.
I'd be interested to know how OP's teacher would answer his/her initial question.