Word when two people use two different languages in a conversation

I believe the most accurate word you'll find for the conversation itself is "bilingual." As in:

The two ladies were having a bilingual conversation

However the inability of the two speakers to fully command both languages is a property of the speaker, not the conversation. The term for this inability is "receptive bilingualism." You would need to change up the syntax a bit to clarify the situation:

The two ladies were having a bilingual conversation, however both were only receptively bilingual in the other's language.

"Passive speaker" is another way to refer to this type of speaker, however this could also imply that the speaker is simply non-aggressive in their speech.

One term that comes up in this context is cross-language (or cross-linguistic). I haven't found a formal definition for this term, but it is fairly transparent. It collocates with "mutual intelligibility" (see below) but also appears in contexts where, for example, the participants in the conversation are employing an interpreter. A couple of examples of use (bolding added):

[W]e aimed to assess the cross-linguistic intelligibility between the related languages as it is in actual practice, i.e. including the effects of the participant’s education. Our study therefore offers an overview of the cross-language intelligibility between related languages . . . .

—Charlotte Gooskens, Vincent J. van Heuven, Jelena Golubović, Anja Schüppert, Femke Swarte & Stefanie Voigt (2018) Mutual intelligibility between closely related languages in Europe, International Journal of Multilingualism, 15:2, 169-193, DOI: 10.1080/14790718.2017.1350185

People using Skype or web applications can now have a cross-language conversation, each speaking in a different language.

—"Real-time Speech Translation in 23 Languages for Business; ReadSpeaker Adds Text-to-Speech Voices to Translate Your World's Voice-to-Subtitles Software", Monday, November 26, 2018 (press release)

Another potentially relevant term is mutual intelligibility. From Wikipedia:

In linguistics, mutual intelligibility is a relationship between languages or dialects in which speakers of different but related varieties can readily understand each other without prior familiarity or special effort.

Note that in linguistics "mutual intelligibility" generally¹ refers to inherent characteristics of the languages, rather than special knowledge on the part of the speakers—that is, it's usually used for related language "pairs" like Portuguese and Spanish or Swedish and Danish,² but generally wouldn't be applied to, say, an English speaker who knows some Mandarin and a Mandarin speaker who knows some English speaking to one another in their own languages.

With that caveat, I think the adjectival form, mutually intelligible, could be used for your situation. The plain meaning of the phrase is fairly transparent and would seem flexible enough to encompass the English/Mandarin situation described above, particularly as it is also used in non-linguistic contexts to describe communication and conversations. Some examples of use, both technical and non-technical (bolding added):

"Are Urdu and Sindhi mutually intelligible languages?"

—Yahoo Answers question (opinions in answers are mixed)

In my experience of observing Spaniards and Italians talking in their respective languages to each another, it is possible for them to have a mutually intelligible conversation as long as they speak clearly.

— Conor Clyne, "How different or similar are Italian and Spanish?" Tsar Experience, August 25, 2016 (blog entry)

Whatever the differences between the Stoics and the Christians, they can be put into mutually intelligible conversation.

—Christopher Kavin Rowe, One True Life: The Stoics and Early Christians as Rival Traditions, 2016

So for your example, you could say something like

• They were in a bus and had a mutually intelligible, cross-language conversation.
• They were in a bus and had a cross-language conversation.
• They were in a bus and had a mutually-intelligible conversation in Urdu and Sindhi (respectively).

¹ _{"Generally" only because I've seen some suggestion that sociolinguistics occasionally use it in a different sense.}
² _{See the May 28, 2014 Language Log post "Mutual intelligibility" and especially its comments for an informal discussion of the degree of mutual intelligibility of dozens of language pairs.}

It has been called code-mixing in academic papers.

Code-mixing is the mixing of two or more languages or language varieties in speech.

Wikipedia

There is a concept of diglossia.

The use of two markedly different varieties of a language in different social situations, such as a formal variety at work and an informal variety at home. [American Heritage]

Usually this term is used when the same people are speaking both languages (e.g. people who speak an official form of the language in formal occasions and a dialect the rest of the time; or else speak English at work and another language the rest of the time).

By stretching it a little, we could also call this particular situation (where individuals speak a single language but understand two) as a case of diglossia?

In this particular case there does not seem to be any high or low language, but simply two persons from different backgrounds speaking different languages (hence it is a situation of multiculturalism) but sufficiently familiar with the other language that they have a passive knowledge of it.

What is interesting to guess, is how this situation might evolve in time: by one language supplanting the other? Or a fusion of the two, similar to what happened to Middle English? Or a third language (as English) taking over?