Yes, it does, it distinguishes Westphalian sovereigns (like thr U.S.) from federated states (like Rhode Island).

This introduces the much more serious meta-problem of distinguishing commenters who merely happen to use 'Westphalian' from Lyndon LaRouche fans.

It is directly applicable, and not at all a used; the broader functional (Westphalian sovereign) and social (the functional definition + two-way close mapping to a nationality) definitions of “nation-state” are both technical definitions widely used (and distinguished by context) in the field from which the term originates. (Just like “consistency” has different meanings in a CAP context vs. an ACID one, except with less ambiguity for “nation-state”, because compared to the functional and social definitions of “nation-state”, the CAP and ACID definitions of “consistency” are far more likely to both be plausibly relevant in the same context.)

The common use in cybersecurity is exactly the functional definition, not an abuse of terminology.