Paul's thought is this: if you are circumcised in the flesh but do not fulfill what is prescribed by the law, then you are still uncircumcised, uncircumcised in spirit; likewise, whoever is uncircumcised in the flesh but fulfills what is prescribed by the law is circumcised in spirit, because his fleshly passions have been cut away. He explains this further as well. Listen.
Rom. 2:26. So then, if the uncircumcised keeps the ordinances of the law, shall not his uncircumcision be counted as circumcision?
He does not say that uncircumcision surpasses circumcision, for that would be too painful, but he says that it "shall be counted as circumcision." Therefore, true circumcision is good conduct, and likewise uncircumcision is bad conduct. Note, he did not say: if the uncircumcision keeps the law; for he probably anticipated such an objection from someone: is it possible for an uncircumcised man to keep the law, when the very state of being uncircumcised constitutes a violation of the law? How then did he express it? "The ordinances of the law," that is, the ordinances by the fulfillment of which they think to be justified. For circumcision was not a deed, but a suffering endured by the one being circumcised, and therefore it cannot be called a justification of the law. It was given as a sign, so that the Jews would not be confused with the Gentiles.
Rom. 2:27. And shall not the uncircumcised by nature, if he fulfills the law, judge you, who with the letter and circumcision are a transgressor of the law?
Rom. 2:28. For he is not a Jew who is one outwardly, neither is that circumcision which is outward, in the flesh;
Rom. 2:29. But he is a Jew who is one inwardly, and circumcision is that of the heart, in the spirit, and not in the letter; whose praise is not from men, but from God.
Here he clearly shows that he means two uncircumcisions, one natural and the other voluntary, which occurs, as was said, when someone in no way cuts off the carnal passions, and two circumcisions, one according to the flesh and the other a circumcision of the heart in the spirit. "The uncircumcised," he says, "by nature," having the circumcision of the passions through the fulfillment of "the law," that is, as was said above, the ordinances of the law, "will judge," that is, will condemn, not circumcision (for to speak thus of it would be harsh), but "you," who are outwardly indeed circumcised in the flesh, but uncircumcised in heart, as a transgressor of the ordinances of the law.
Thus, he rebukes not circumcision (which he apparently respects), but the one who insults or transgresses it. Then, having proved this, he clearly defines who is a true Jew, and gives to understand that the Jews did everything out of vainglory. "For he is not a Jew," he says, "who is one outwardly, but he who is one inwardly," who does nothing in a merely sensory manner, but understands spiritually both the sabbaths, and the sacrifices, and the purifications. When he says: "circumcision is that of the heart, in the spirit," he paves the way for the Christian way of life and shows the necessity of faith; for believing with the heart and spirit has praise from God, who searches the hearts and judges nothing according to the flesh. From all this it follows that everywhere a righteous life is needed. By the name of the uncircumcised or gentile he means, as was said above, not an idolater, but a pious and virtuous person who does not, however, observe Jewish rites.