There is no sharp demarcation. It's not like you will see a balloon floating with a sign saying, "Here be the edge of space." The Von Karman Line at 100 km was chosen as a legal demarcation because below it, aerodynamic forces are predominant, and above it ballistic forces are predominant. They crossed the Line, so they are in "space" for all legal purposes. If they had stepped out unprotected, that would have been no less fatal than at a higher altitude. There is still vestigial atmosphere at higher altitudes. The International Space Station occasionally needs to "reboost" its orbit due to decay by atmospheric drag.

You can get weightless in a falling elevator car (no good ending) or in an airplane that flies a parabolic arch trajectory. A training aircraft for that purpose was nicknamed the Vomit Comet for good reason. So, what was happening with the Blue Origin passengers was that they were shot straight up and when the thrust ceased, were therefore subject to "free fall" (uniform acceleration of gravity) up to, at, and after their peak altitude.

They are falling with an initial velocity of zero, and as the drag increases, the descent acceleration decreases and they stop being weightless. All such bodies reach what is called a "terminal velocity" where the drag equals its weight, usually no faster than a hundred miles per hour or so. Not nearly fast enough to scorch anything. We have automobiles you can buy (e.g., Bugatti) that are capable of reaching 400 mph, which was once considered a land speed record. No scorching. Jetliners fly at 600+ mph. No scorching.

I hope that clears things up. Always willing to answer a sincere question. No snark.