Saudi expatriate culture, by and large, is a great example of Anglosphere/West culture. The majority of expatriates in Saudi (at least when I was there, moving target) were from Texas. Oil production experience, and all.

In all honesty, my experience with people correcting my usage could be a back-lash of the very usage of the words as you had described them. The culture there has been using the word 'expatriate' for decades, and there was probably a stigma avoiding using the word as a class designator that manifested itself in a gentle 'scolding' for my usage in the way you described.

I agree with you completely; for these words, context is everything. Intent in usage plays a big part as well.