I don't think there is a universally agreed upon definition of what transit means other than it involves someone paying someone else.
Uhh, "transit" is an English word which comes from the Latin word meaning "it goes across". Transit has nothing to do with payment at all. The only thing that everybody agrees on is that transit is carrying packets across your network to another network. Clearly, you could give away free transit if it helps you sell T-shirts, or data center racks or some such, so payment is just not relevant at all. The problem is that "full transit" is such a common thing, that many people just assume that "transit" means "full transit" and there, the misunderstandings begin, especially with people that haven't had experience with ISPs who make up their own rules instead of just copying the one down the road.
I have no idea what the sales people call each in different countries, but domestic transit is not a misnomer as the ISP selling you this will be providing reacheability to their country specific customer base AND reacheability to their country specific peers.
Typically, sales people don't care about terminology and will happily call "free transit", "paid peering" if it helps them make a sale. But fundamentally, peering is about carrying packets from your neighbor's network to destinations on your own network in return for the same thing the other way around. Again, payment is not part of the definition of peering. Peering always involves two networks who are neighbors. Transit always involves three or more networks who are not neighbors and who have a third party network in between them. The packets all have to transit the third party network. Most everything else is either marketing, or the jostling and adjustment that happens when you discover that your business model isn't actually profitable because you didn't think through your pricing structures in enough detail, and some companies more clever than you have locked in contracts that you really should not have signed at that price point. --Michael Dillon