Great question, RW.
I'm over here from the Family Law board; my DH has two daughters (12.5 & 14.5!) and their mom, while undiagnosed, has many challenging traits and behaviors (blaming, self centeredness, badmouthing DH, manipulation, enmeshment with the kids, "mis-remembering"/alternative pasts, etc). Oh, and 3 months after the divorce was final, she was engaged to DH's former best friend, who if I had to label, I'd say is uNPD. Yay. This has been the situation for the last 8 years or so.
Because the kids are mostly at Mom's house, and because of the depth of their investment into the narrative at Mom's (that she and Stepdad are amazing, insightful, wise, warm, wonderful people, and that DH is insensitive, selfish, doesn't care, is dull, etc), we have not suggested to the kids that she or Stepdad have PD traits.
We try to talk about behaviors with them in other contexts. For example, SD12 likes talking about friend situations more than family situations, so I try to be validating about how hard it is when a friend seems "hot and cold" or you feel like "they never liked me for me, they were just using me". With her, it's more about finding related moments to talk about inappropriate and hurtful behaviors -- she is pretty enmeshed with Mom and Stepdad right now, so she is not in a place where she could engage with any idea that actually, they are being hurtful to her by being "overconcerned" with her and intrusive into DH's parenting time.
SD14 loves books/graphic novels, so that's fruitful ground for discussing "why did he do that, why doesn't he seem to change when it's obvious he's being hurtful, why can't he see what's true about himself". I think I actually dropped the words "personality disorder" when we were talking about a character who is obsessed with being "on top" / the best, is hurtful in his path to do so, is self centered, and doesn't show growth or insight over a long time period.
When they were younger, we watched a LOT of the reboot of My Little Pony, which was a godsend. Lots of opportunities to talk about "why was that pony committed to a false narrative about the other ponies? Why did she want to believe her own feelings, and not the truth of what was actually going on?" It sounds crazy but it was a really, really good show for "talking opportunities". And if you like easter eggs/surprises they throw in a lot of stuff for the parents.
SD14 is now recognizing on her own that Stepdad's words don't match his actions. He says he's all about caring, listening, and processing, but she sees that he is pressuring her to talk about stuff she isn't ready to talk about, and that the "price" for feeling close to him is having no boundaries, and that he's that way equally with Mom, the kids, and his friends. SD14 is now at an age and place where she actually unloaded a bunch of that to DH, and he was able to share with her (and have her listen) that Stepdad's MO is inappropriate.
...
It might be good to consider whether being right or being effective is a higher priority. We have had to go with "be effective" over the years, and it is difficult to spend a long time seeing the kids buy into a lie. But, the upside is that we aren't DOING the same thing that Mom/Stepdad are doing -- the pressure of "you have to agree with us, or we'll withdraw closeness and warmth". So the kids don't feel pressured at our house to "see things our way" or "agree that Mom and Stepdad are the problems", and that is laying a solid foundation for those discussions down the road.
Both kids were in counseling about 4 years ago; now just SD14 goes ~1x/month or so. That is helpful too -- a neutral 3rd party can have the foundation to say things in an effective way that parents/stepparents don't have.
...
But, we were/are in a different situation than you, so it's a good question about what "crosses over" to you and your son, and what was more particular to us.
It sounds like you did a good job talking with your son about his perceptions. I want to applaud you for this, too:
Since he is very close with his mom I didn’t want to bring up BPD (especially since it’s undiagnosed). I didn’t want him to worry about her and ask her about it.
You're in the right headspace about his relationship with his mom. Whoever and however she is, she's his mom, and especially at age 7 (right?) and after trauma, he needs to have "as good" a relationship with her as possible.
Staying away from labels is a wise move with kids. Sticking with talking about behaviors is smart, like you did.
Another positive move you can bring in is asking validating questions of your son. What that will do is show that how he feels is important to you, and that is crucial for kids. The "vibe" they can get from disordered parents is "the way I feel is more important than how you feel, so if you want good feelings/warmth from me, you gotta make me feel good first". You, though, can model healthy focus on your son through validating questions. That could look like:
Son: "Mommy said you didn't help her, but you did."
You: "How did you feel when Mommy said that?" <--validating question
or
Son: "I hate Mommy! She's so mean. She said she hates you."
You: "Oh buddy, that's a lot of feelings. How are you doing with those?" <--validating question
Notice that there is no directive about "Don't hate Mommy!" or "Mommy was wrong and I am right" (not that you are doing those things, just an example). You aren't telling him how to feel or who was correct. You're getting to the core of his feelings which are about confusion (what's going on?), hurt (I love my parents and yet it seems like they don't love each other), and needing adult help.
...
You are making good intuitive moves that are age appropriate with your son. Keep the focus off of labels. Bring in examples from friend situations, books, movies, & shows (to keep it "neutral" and not "charged" i.e. about Mom). Don't hesitate to talk with a child therapist on your own (unless Son already has one?) about navigating and balancing this tricky subject.
Because it would be possible to tip the other way... to gloss it over... to invalidate your son's perceptions by saying stuff like "Mommy just had a bad day... let's be extra nice to Mommy" (again, not saying you are doing this, just an example). So you are doing good work threading the needle by accepting his questions and perceptions about Mom, doing your best to explain a behavior and not label a person, and respect the fact that he has a relationship with Mom.
...
I guess to address your root question:
how people here have decided when their children were ready to hear about what was behind the problems
we haven't yet, and the kids are tween/teen, and our teen is only now starting to be ready to hear.
But we talk about behaviors, when we can, and talk about other examples, and if we do use labels, it's on a neutral situation.
It's more about the relationships than the "reveal the underlying dynamics", I guess. I think it's more important HOW we relate to the kids than (generally) WHAT we say to them. We try to relate in a way that doesn't pressure the kids to "choose us or them", that doesn't badmouth, that doesn't blame. It will probably be more difficult for your W to relate to your son in the same way. So, even if she "says the right words", there will be a different feel to the relationships your son has with her vs you.
Sorry if this was sort of all over the place...
Let's keep talking if you want!
kells76