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Vasco is to someone del país vasco as Brit is to someone from Britain. It’s referring to nationality not language.

He told me he saw some ad in “Vasco” in an occupied house…

Fair enough. Maybe he was using the same way we say español when we really mean castellano

Well, if it’s their language, why are not going to call it “vasco”? They are indeed “vascos”. Seems fine to me.