If this is before Zero begins Sub Arcadia, how can X know and talk of Vile's brainwashing as happening before he even begins it?... This does not add up to me.
X knows what Dark Elf is capable of and remembers the Elf Wars. His belief is that Weil will attempt to repeat the tragedy of the Elf Wars, he said as much already previously during the game, just didn't go into as much detail in front of Zero. X says it's probably already begun, denoting in fact that he does not know, but that time is of the essence, and by the time he gets back, he's right, it has started.
Finally, Phantom considers Zero as capable of defeating Omega. Whereas before his battle with him, he was uncertain if Zero could even be considered a hero.
Phantom knows of Zero's past, but still wishes to experience the strength of Zero's resolve through battle. The test of the hero. This is how he "helps" Zero.
Got a quote for this? I don't quite see it in the translation I have at hand.
What translation are you reading from, anyway? I know it isn't one of mine.
Phantom: ...My darkness... serves no other light than yours. Is the truth of his blade enough to protect humans and repliroids...? All I am able to do... is merely to ascertain this truth for myself. If I once again... become to the blade...
Cyber X: You never change... do you.
Phantom: One who changes easily can never be called loyal.
Cyber X: I understand. I trust in that unwavering heart of yours. Trust in me, as well. Zero will surely overcome anything.
Phantom is determined to see Zero's true character in battle, which is exactly what he does. X allows this, because he's sure Zero will prove himself, and tells Phantom as much.
He alludes to it again in Will 3.
Fafnir: Hey! What're you gonna do, Phantom?
Phantom: My destiny drifts in the darkness. There is still something that I must do here.