Question: How does one know when one is speaking Urdu? When does Urdu begin: Once we say "Hindustan" (or some other specific word)?
I think yours is a great question that does have a political dimension. In Punjab / around the Northwest of India, I would hear many speakers prefer to just say "India" (using the English word). In a place where Muslims, Sikhs, and Hindus (amongst others) each have significant claims to public culture, it would sometimes feel weird to call the place "Hindustan" (so far as that might be interpreted as "land of Hindus"). Not to mention the fact that some considered the "real" Hindustan to literally be the lands where Hindu people are more predominant, to the South, so that in fact whereas they are in India they are not in "Hindustan." At the same time, "bhaarat" has a Sanskritic-ness to it that is not completely to the taste of all. So "India" it is, and Hello and Goodbye! (It will be interesting to see how many native Hindi speakers here, from among people spread across a huge area, will generalize their own personal experience as representative of Hindi—and to see people whose impression was formed through living in places where Hindi speakers receive varying forms of entitlement.)
Interesting. I've heard a certain pandit using Hindustan, but he's actually from Northern India. I have a tendency to use Bharat, but given my path and love of Sanskrit, that makes sense (although it wasn't intentionally done for that reason, it's just what always feels right to me). Typically of native Hindi speakers I know, it's these two I hear them use, but mostly Bharat - even when they are speaking in English.
Hindustan is an Urdu word. Urdu words are also used in India depending on the location and yes, sometimes people may use "हिंदुस्तान" especially in places like Lucknow or Delhi which were ruled by the Mughals for hundreds of years, speakers of Urdu. In today's time, we would generally use "भारत" or just "India". There are no negative consequences for using any of the three.