The law makes a clear distinction between the two. All citizens are nationals, but not all nationals are citizens.
After looking at the State FAM, I'll concede that they are enforcing it as if it "nationality status" meant "citizen" or Non citizen national. Thus if the unwed mother is a non citizen national, the baby born outside the US is non-citizen national, if she's a citizen he's a citizen. But in either case, by law, not necessarily natural born per the Constitution. The FAM says that too.
THAT law does does not make the distinction and you can read the US Supreme court to understand the point.