Japanese are Japanese till Japan exist after that they will be join the club or yellow race. So is the case with Germans, who will be categorised as Europeans or whichever country they belong to. For that matter any country, not with an intention to troll but for example sake, if India is not there, Indians will either be categorised as South Asians. Two nation theory has been interpreted as per individual desires, base of two nation theory was never an Islamic state. It was a state for Muslims because it was felt that Hindus and Muslims of Subcontinent (India) cannot live together, Muslims felt their rights would be usurped. Therefore, India was divided into Pakistan and Bharat. Later slogan of "Pakistan Ka Matlab Kia" came into existence. Until 1940, efforts were to have united India with equal rights for Hindus and Muslims. Even after that, efforts to keep India continued, which is substantiated by the fact that AIML participated in elections after WWII. However, not being able to reach a common agenda resulted in partition.
It is in the nature of humans to have recognition. Is due to this reason The Divine revealed
The creator tells the creation what he has instilled in him/her as nature. If you look at the verse it does not address Muslims but addresses Mankind. I would take this as his indication to us that being a nationalist do the righteous thing. He being creator knew what his creation is going to do with the interpretation of Divine Religion, thus, has provided a solution with in his book.