Halliday & Matthiessen (1999: 220):
The grammar does draw a line between the two: participant as nominal group, circumstance as prepositional phrase. But because of the continuous nature of the distinction, we find three kinds of mixed categories: (i) participants that may look like circumstances (being introduced by prepositions); (ii) circumstances that may look like participants (being introduced without prepositions); and (iii) pairs where one is a circumstance, the other a participant, but with very little difference in their meaning.