I thought this was a superbly clear passage on delimiting the definition of justification in Paul in Galatians 2. Very helpful. Again from NT Wright’s Justification pages 116, 117.

BOQ

So something has happened to Peter—something so profound that he now has a new identity, which affects key behavior patterns and taboos about that very central human activity, sitting down to a meal. And it is on that “something,” that change of identity, that transfer from one family to another, and the new position which membership in the new family creates, that Paul now concentrates, broadening what he has said to Peter (and hence, in the context of the letter, what he has said about Peter) to a more general statement (Galatians 2:15-16) about all those who, though born Jewish, have become Christians.

“We are Jews by nature,” he writes, “and not ‘Gentile sinners’ (Galatians 2:15). That last phrase is a technical term: “lesser breeds,” as it were, “outside the law.” It represents, as do the boasts cataloged in Romans 2:17-20, what Paul knew to be a standard Jewish attitude, rooted of course in the Scriptures themselves. He is talking about ethnic identity, and about the practices that go with that. And he is about to show that in the gospel this ethnic identity is dismantled, so that a new identity may be constructed, in which the things that separated Jew from Gentile (as in Ephesians 2:14-16, on which see below) no longer matter. This, and only this, is the context in which we can read the famous and dense verse 2:16 with some hope of success.
Despite the fact that “we are Jews by nature [i.e., by birth], not ‘Gentile sinners,” “we nevertheless know,” he says, “that a person is not justified by works of the law.” Here it is: the first statement of the Christian doctrine of justification by faith. Or rather, the first statement of its negative pole, that one cannot be justified by works of “the law”—which, by the way, for Paul, always means “the Jewish Law, the Torah.”

Now: another thought experiment. Let us suppose we only had a fragment of this letter, consisting of 2:11-16a, and stopping right here, “not justified by works of the law.” What would we conclude about the meaning of “justified”? We might well know, from extraneous verbal evidence, that “justified” was a lawcourt term meaning “given the status of being ‘in the right.'” But Paul is not in a lawcourt, he is at a dinner table. The context of his talking about “not being justified by works of the law” is that he is confronted with the question of ethnic taboos about eating together across ethnic boundaries. The force of his statement is clear: “Yes, you are Jewish; but as a Christian Jew you ought not to be separating on ethnic lines.” Reading Paul strictly in his own context—as John Piper rightly insists we must always ultimately do—we are forced to conclude, at least in a preliminary way, that “to be justified” here does not mean “to be granted free forgiveness of your sins,” “to come into a right relation with God” or some other near- synonym of “to be reckoned ‘in the right’ before God,” but rather, and very specifically, “to be reckoned by God to be a true member of his family, and hence with the right to share table fellowship.” This does not clinch the argument for my reading of the whole doctrine. But the first signs are that, for Paul, “justification,” whatever else it included, always had in mind God’s declaration of membership, and that this always referred specifically to the coming together of Jews and Gentiles in faithful membership of the Christian family.

EOQ