I think the best guide here is your crown molding. I'd stop the paint color where it stops. I can't tell in the photo if there is a corner on the right side where the crown molding stops or if it's just a flat wall. That might present problems on that wall, but there are creative ways to transition into the next room. I've handled that situation in various rooms with a curving line, a zig-zag, a large curve, scallops, etc... it can look good depending on the decor.

It looks like your crown molding stops in a certain spot so that's a good transition spot for the paint too. (I'd paint the molding white if you can, it will make the room look taller).

Since it's an open space consider picking two colors close to one another, maybe one a shade or two darker or lighter. This will define each space but still keep them looking cohesive.