SQL Query Group data in Table 2 by time events in Table 1

Ignition
8

I presume you want to ignore repeat ones and zeros in the output column? If so, running periods from table1 would be something like this:

Select t_stamp as start_ts,
  lead(t_stamp, 1, current_timestamp) Over (Order by t_stamp) as end_ts
From (
  Select t_stamp, output
  From (
    Select t_stamp,
      output,
      lag(output, 1, 0) Over (Order By t_stamp) as lag_out
    From table1
  ) innerq
  Where output != lag_out
) changesq
Where output = 1
Order By start_ts

And similarly, downtime periods from table2 would be something like this:

Select t_stamp as start_ts,
  lead(t_stamp, 1, current_timestamp) Over (Order by t_stamp) as end_ts
From (
  Select t_stamp, output
  From (
    Select t_stamp,
      output,
      lag(output, 1, 1) Over (Order By t_stamp) as lag_out
    From table2
  ) innerq
  Where output != lag_out
) changesq
Where output = 0
Order By start_ts

You would make a join of these two queries where the time spans overlap.

In each of those, innerq obtains the previous record’s output value and then changesq throws away the repeat rows. The outermost Select then produces time spans and throws away the intervening opposite states.