Achieving orbital velocity on earth's surface is not practical due to earth's atmosphere. First a ship must get above the atmosphere and then achieve orbital velocity.
Once altitude is gained, the most efficient way to achieve orbital velocity is by a horizontal burn. You could do the major burn along a non zero flight path angle but then the vertical component of the thrust suffers gravity loss.
Typically, the first part of a space ship's trajectory is nearly vertical but then leans to the east to give the thrust vector a bigger horizontal component as the atmosphere gets thinner.
When the ship's above the atmosphere it does the major burn and is traveling at a near zero flight path angle (In other words, horizontally).
So a direct insertion to lunar orbit would be doing burn to achieve 10.9 km/s horizontal velocity when above the atmosphere. But at sometime during this burn, the ship will be traveling at a horizontal velocity of 7.8 km/s. At this point I would say the ship is in orbit. After achieving orbital velocity the ship could keep on firing to achieve another 3.1 km/s for Trans Lunar Insertion (TLI).
Or it could cut off the engines after achieving orbital velocity and the do the remaining 3.1 km/s TLI burn later. What is the difference is delta V? Zero.
From John Schilling's launch simulator methodology pdf:
The Townsend technique begins by assuming that all space launches
consist of a direct ascent to a low circular parking orbit, followed
by a series of on-orbit maneuvers to the final destination orbit. In
fact, many launch vehicles fly only a direct-ascent trajectory, even
to a high or non- circular orbit. However, an observation of these
trajectories almost invariably finds the launch vehicle, at an
altitude of a few hundred kilometers, accelerating almost horizontally
through the local circular orbit velocity. One may simplify the
problem by treating this as an instantaneous "parking orbit", reached
by direct ascent, and with all subsequent powered flight treated as an
Emphasis added mine.
Again, virtually all trajectories are in low earth orbit for a time. Sometimes very briefly, some times in an extended parking orbit.