Orbit is when you turn the engines off and stay up there.

Orbit is mostly about speed, not about height. Going straight up and down doesn't count, even if you pass the height that some orbital vehicles attain.

This vehicle is actually going orbital speed, but not quite orbital height (or rather, it's in an "orbit" that has a very eccentric elliptical shape that would cause it to hit the atmosphere on its way back around; it'd be well above a typical orbital height at apogee, though).

Orbit is when you drop an apple off a dining room table - it’s just a very crappy orbit.

“On orbit” typically means in a stable orbit around a body - but in the case of starship, it could have been on orbit, the delta v is more than sufficient, but that’s an unsafe configuration if you don’t know your engines will relight.

Space is generally defined to be 100km above earth's surface, an arbitrary point called the Karman Line [1].

Orbit is when an object is traveling so fast that it reaches the horizon of a body before the body's gravity can pull it down to the surface, but perpetually. It's basically perpetually falling around the body. Imagine one of those guys in a wingsuit skimming along the surface of a mountain, never actually touching the surface. It's similar to that, but at a much higher scale.

1) https://en.wikipedia.org/wiki/K%C3%A1rm%C3%A1n_line

It's in space (above the Kármán line), but not in orbit. Orbit implies it has the velocity for staying in space, which isn't the intention here. If anything goes wrong they want to be able to not leave junk in orbit

Orbit is a speed, not a distance. You could do a suborbital hop that has its highest point beyond the orbit of the moon. (if you aim very, very well)