You guys beat me to it. Always use the language from the rules (windward, leeward, etc.). "Upwind" does not appear in the RRS for this situation (look at the definition of "Leeward and Windward").

As for the question at hand, this exact question (slightly different scenario) of when to chicken out came up at a North U seminar a few weeks ago. Brad Dellenbaugh was the instructor. Search the web for his qualifications, but I'll take his word for it any day over anyone here (no offense to anyone here).

Basically, he said that the leeward boat gets to make the determination, and the time/distance is not always the same.

The example that he gave was this. In a tight fleet of top-notch sailors, you can get closer without issue, because everyone has a good sense of what the other guy is capable of, and is likely to do (assuming eye contact, etc.). In a fleet with more inexperienced sailors, the newbies may panic a bit sooner and say they needed to avoid collision. The PC will usually agree with the ROW boat (within reason).

Hope this helps.

Mike