Sounds to me like what you have is open spraying within a building. To me a paint booth is a fabricated enclosure placed within a building to contain the hazard. If you look at the example drawings in 516 they all show an enclosure with clearances around openings, other than the open spraying one.
Based on what your describing, I think your instinct is correct and the entire building should be wired as a classified location, including the overhead lighting. Mechanical venting equipment can and does fail, and when it does in the middle of a paint job, you will have a building full of vapors. Light fixtures and lamps can fail and spew hot parts down into the work space, especially unenclosed HID fixtures. It normally comes down to a argument over the costs to do it properly versus safety, sounds like that's where you are.
I have wired many hundreds of paint systems and mix rooms large and small over the years as well as hazardous dust collection systems. From little lab booths to booths large enough for two city buses., and one building for train tanker cars, similar to what your describing. The tanker car building was for coating the insides of the tanks, not for spraying the outsides, so one could think that that would somewhat reduce the hazardous area.
Short story on that job. At the first meeting about that job the plant owner wanted to install the main control panel up at the building ceiling, to avoid the hazardous area and blasting media from the operations. All of the venting and dust collection equipment was to be installed on the exterior of the building. I advised that the controls should also go outside with the equipment, he objected and wanted them at the ceiling. I said that I would get the inspector in for a preapproval for what he wanted. The meeting turned into a cussing and spitting contest and I walked out. It was decided that the controls were to be mounted outside. I performed the equipment wiring and the owners electrician did the feeder and building lighting. It worked fine for about a dozen years, until it didn't, then the metal siding was blown off of the entire building. The outdoor equipment and the duct-work was fine but the building no longer had a skin.
I never pursued the cause of the explosion, or if anyone got hurt in the blast. But what I do know is that I never got sued for involvement with the project, and that all of the equipment and ducting is still working fine 15 years later, after the building got repaired and skinned. I would suggest that you get an engineering approval and an inspectors approval beforehand if you have any liability in the project. And to keep your liability coverage in force if you do move forward with the project.
