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What you've written is right as far as I can tell. Catholic usage for "justification" is different from some Protestant uses of the same word and that can make communication difficult unless it is recognised and agreed definitions are used or if not agreed definitions then alternative words that make the desired distinctions without introducing the confusing non-overlapping portions of the perceived meanings for the word. And the word "faith" is also used in distinct ways by Catholic and Protestant theologies. Catholic usage is more along the lines of "assent and belief" rather than "trust and commitment" but the word "faith" is confusing at times no matter who uses it. James in his letter uses "pistis" (and its cognates) to describe both Christian faith and the faith of demons. Clearly demons have no trust in God and commitment to God yet they do have belief (faith) and possibly assent without willing obedience.The OP raises the question of what justification means. It's pretty clear that the Catholic tradition uses it in a broader sense than the Reformers did, that it almost includes both the Protestant justification and sanctification. That's one reason that justification by faith seems absurd to Catholics (combined with the fact that Catholics often use faith in a narrower sense than I think Luther did).
There have been interconfessional discussions between Lutherans and Catholics that have helped understand this.
Being clear about definitions removes some of the disagreements. But I don't think it removes them all. Catholic theology (at least seen through Protestant eyes) maintains that one can lose justification by mortal sin. That idea is consistent with the fact that justification is a single thing that includes our own progress in the Christian life. However for Protestants, justification isn't lost by sin. It's not that God doesn't care about sin. He does. But he remains our Father even when we're disobedient. He deals with us as disobedient children, not as people who have ceased to be his. By separating justification and sanctification, we can more easily talk about the fact that sin has consequences, but that God's commitment to us remains constant.
As I'm sure you know, Protestants differ on whether someone can lose justification. Some think not. But in my opinion if it's possible, it's not through sin, but through something like apostasy -- abandoning faith completely.
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This issue is complicated for me in that I think traditional Protestant exegesis of Paul has some issues. I think what Paul means by faith shades into faithfulness, and I think "works of the Law" refer specific to Jewish cultic practices. Hence I think he's saying that our status as Christ's people (justification) comes from the fact that we're his followers (faith) and not any checklists, whether cultic actions like circumcision or modern equivalents.
Yet I still think that our status as Christ's people does in fact persist even in the face of serious sin, as long as we continue to be Jesus' followers. I'm not sure that Paul, properly exegeted, actually deals with this question. But I think Jesus does. Hence I tend to base justification by faith more on Jesus' teachings than Paul's. I think this is distinctly atypical. Incidentally, I also understand many of Jesus' warnings about judgement as being aimed at followers, not atheists. So sin among his followers will have consequences, though his teaching on this subject is sufficient couched in parables and hyperbole that I'm skeptical of attempts to produce specific descriptions of just how that works. (1 Cor 3:12 may actually be the most literal treatment of this topic in the NT.)
I am inclined to think that ancient Latin (and hence Catholic) usage for "justification" may have leaned more towards the legal and court room perspective than was healthy and may have contributed to the Protestant adoption of a strongly legal meaning for the word. I think that the Greek word may also have led to the Latin choice of meanings for justification. Both Greek and Latin church fathers did not have a deep sympathy for nor a good understanding of the vocabulary of the Hebrew/Aramaic testament and that too may have led to the emphasis on legality in the range of meanings for the word. The idea behind "justification" in the old testament appears to be much more inclined towards active righteousness in living and it stemmed from assent and belief as well as trust exercised towards God. That is how James understands Abraham's obedient act that led to God speaking of him as being "made righteous by faith". Without the action, argues James, the "pistis" (belief) would have been no more capable of justifying Abraham than is the belief that demons have capable of making them righteous before God. But Abraham did act and so he was "justified" with God because he acted as well as believed. Hence James argues that belief (faith) without works (action arising from belief) is dead.
A good deal of the heat and smoke generated in the centuries following Martin Luther's excommunication in 1521 has been from the opposing sides using the same words but with different meanings. Of course national self interest and tribal allegiance led to serious conflict with religion as the spark that ignites and the fan that feeds oxygen to the conflagration.