This is my unauthoritative answer based on my personal experience.
My grandfather was born before the partition, in an area now controlled by Pakistan. At some point in his life, he moved to the UK where he married my grandmother. I met him a handful of times growing up, and I know that inbetween visits he went back to living in Pakistan. He died there a few years ago.
Because I knew he spent time living there, when applying for the e-visa I elected to answer "Yes" to the question Were your Parents/Grandparents (paternal/maternal) Pakistan Nationals or Belong to Pakistan held area.. On completion of the e-visa form, I was informed that I did not qualify and that I need to apply for a paper visa at the nearest High Commission of India. So I made an appointment and assembled the painfully poorly documented set of paperwork spread across broken links on the VFS website, such as the pro forma (which is a questionnaire ostensibly designed to be sent in advance to VFS for them to help determine whether you are a Person of Pakistani Origin or not but in practice they ignored it), enumerating all four of my grandparents and where they were born, an exhaustive list of every country I'd visited in the past 10 years and the entry/exit dates, my salary and employment status, a detailed itinerary of my trip and the contact details of who I was visiting there.
I took the document bundle to the VFS Goswell office where they had a look at the pro forma. Neither my first application handler, nor his boss could tell me there and then whether I qualified as a Person of Pakistani Origin and they even asked me why I answered Yes to the question. They asked me leading questions about whether my grandfather really was Pakistani or not such as asking if he moved to the UK before the partition. They said that technically I was missing an affidavit declaring that I had never had Pakistani citizenship. They suggested I write a cover letter instead mentioning how minor a relationship I had with either my grandfather or the country of Pakistan. They refused to accept my application, and said they would first submit the bundle to HCI and let me know whether they could process it without the affidavit, and to return to VFS in a few days. I said I live 3 hours away from London so it wouldn't be practical to return and they offered me to post my passport once they decided whether they could accept the application.
A few days later I got a call from VFS saying they would process my application if I send my passport off and pay the fee over the phone (~£140). I did so, and a week later, I got an e-mail stating a decision had been reached and my passport was ready to be returned. The next day the passport arrived with a slip of paper saying my application was still being processed and I'd be contacted "shortly" (i.e., contradicting the e-mail).
A month later, just days before my scheduled trip, I received a call directly from the High Commission of India. The chap basically complained that based on my documents I seemed too British to have answered Yes to this question, and went on to ask whether my grandfather was born before the partition and if he moved to India afterwards. I answered he was born before the partition, and he definitely moved to the UK and lived there for a long time when he was a teenager, but whether he went back to Pakistan and became a citizen there I did not know. I also did not know whether he obtained British citizenship whilst in the UK.
The HCI agent advised me that if I wanted to proceed then my application would need to be submitted to "the Ministry" but he suggested I apply for my visa again and answer No to this question instead. I took his suggestion and he said he would cancel/reject this application and I would be charged for the visa application again if I wanted to re-apply for the 12 month visa.
Because my trip was now only a couple of days away, I decided to just re-attempt the 30 day e-visa application and answer No. Every other detail of my application was identical to the first time I applied for the e-visa and this time it was accepted successfully, and the visa was granted just 12 hours later. I made my trip and both entered and exited India without issues.
In summary, answering Yes to this ambiguous question cost me nearly £200 in a paper visa application, travel to London and 5 weeks of anxious waiting to see whether I would make the trip.
