The hustling in the Hustler probably occurred when Fats told Preacher to bring him some white tap and whiskey with ice and a glass, and to get it at Johnny's. Sure enough, Eddie asks Preacher to bring him some bourbon (JTS Brown, no ice, no glass).
Realizing that Eddie was a superior player or at least Fat's equal, Fats got him to start drinking straight Bourban. Fats either drank less whiskey, or drank it more thinned out, and thus got an advantage.

When Eddie made the jump to "big time pool" the "hustling" was over. The title of the movie really missed the mark, but it probably sounded better than anything else they could come up with. I played pool when I was a teenager but never bet on any games and really can't fathom how anyone could get sucked into a hustle. We always played to see who was better because the winner didn't pay for the next game, if you couldn't throw down your best game the first time then kindly find the exit, don't hold back because you might not get another shot, and yeah, it was definitely about pride if you get outplayed practice more.

At their level the only people who will take them on are hustlers who think they're better. Just like Eddie did the first game. Otherwise they'd only be able to play in organized tourmanents to make a living.
I saw another Hustler like movie years ago with James Corburn (I think that's who it was). He was a hustler who basically kept a low profile. He'd go to such tourmanents and hustle the contestants before they played in the tourmanent. At one point one of the hosts asked him to stop hustling his players and sign up to play in the tourney. I'll have to look that one up. I don't really remember much because it was many years ago