You're probably right but I still catagorize it as chit-chat because it's chit-chat for the characters inside the story. I have some weird definitions I'm sure, because that's what I define it as in my own story.
I guess the question is -- obviously, there are countless "off screen" events in the putative lives of our characters. They sleep. They go to the bathroom. They visit their relatives. They get in the car and drive from where ever they exit one scene to where ever they enter the next scene some distance away.
But we make a point of cutting all of that stuff out because the character isn't doing stuff that's useful to the story that we're using *him* to tell.
Because, let's face it -- We all live for years -- and our characters, in principle, the same. But we've only got them for a couple hours (and they may not even be on screen for all that time, so we may even have them for less.
So yes, in principle our characters may spend many hours of their lives chit-chatting, just as they spend many hours watching TV, hanging out with pals -- doing all sorts of things that don't help us move our story forward.
But why would we want to use any of our incredibly valuable and limited two hours or less of the time we're going to have with them for any of that stuff?
"Inside the story" - shouldn't they be up and about and doing what they need to do to advance the requirements of the story?
And while it's not impossible, it's rare that "chit-chat" (at least as I understand it) is going to be doing that.
Now, there are lots of scene where characters are having what *appear* to be casual conversations but which are actually much more than that. Much more than that is going on.
That's differerent.
And if the issue is writing dialogue that has a natural give-and-take flow, so that it doesn't come across as plot-driven and on-the-nose, that's also different.
But in both of those cases, it isn't really chit-chat, because in the scenes in question, the story is still moving forward.
NMS