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 circumstance, the other participant, but with very little difference in their meaning.