Erik,
Ultimately, this decision is up to the Committee (either course staff or tournament staff). Rule 33-2 requires the Committee to clearly define out of bounds. In course out of bounds is regularly used for two main reasons*.
1) Safety
2) To require play in the way the hole is designed
Based on these considerations, a driving range, whether between holes or on the periphery of the course, will regularly be defined by the Committee as out of bounds.
Gearhart Golf Links is the only course recently used by the OGA during our Championships where the driving range was not defined as out of bounds. In both events there (the Women’s Stroke Play and Super Senior) the field was on the small side and the course did not have a formal driving range. The area between holes #1 and #9 was designated as a practice area. With respect to the two considerations above, with the small field size and the layout of the neighboring holes it was unlikely that a player would be in jeopardy of a practice ball striking them and there was no advantage, in fact, it was a disadvantage to play the hole into the practice area.
*other factors may influence the Committee as well including obstruction relief from perimeter fencing or defining such fences as integral parts of the course.
Thank you for your interest in the Rules of Golf – regards,