Still waiting for MarshmallowMan's belated answer to my previous wall of text.
Who says that his Z-Buster in X7,X8 and CM malfunctioned?
He didn't say it malfunctioned, he simply said it was absent. Its absence means we have no way of knowing what happened to it between the X and ZERO series. Therefore, any explanation for its absence that will be given in due time, can be linked to giving Omega a near identical gun as Milan's. There's simply no reason to assume that the bustershot overwrites the Z-buster's existence in the matter you're proposing.
Though, it might just be the case that it really isn't usable anymore. Note that he's an especially poor match with Mach Jentra even in cutscenes, because Jentra is an aerial adversary and Zero is a melee fighter. Likewise, Zero vanishes from the cutscene when the Federation attacks them with flying mechaniloids.
The fact remains that Omega and Zero use the same model of buster. So if Omega's buster is the Z-Buster, then simple logic dictates that Milan is running around with the copy Z-Buster. But this is not the case.
Another thing that discounts Thanatos' notion is we have to factor in the use of the Z-saber as the bustershot's magazine to allow for charging. The Z-saber isn't part of Zero until X2, yet his Z-buster has noticeable charge capabilities even back then. Likewise, the Z-saber upgrade that allows for charging has not yet appeared in the X-series and the bustershot in question seems designed to work with it.
It would be okay, only if she have mentioned her name in the first place. I hate it to be kept dumb and I would have asked after her name, when I was Aile or Vent. It is first unpolite and second not helpful, if that person went missing. You understand?
What's so odd about calling your "sister", your "sister"? Given the situation, her name was the least important thing for them to know. Even if they asked for her name, to them, Ciel will always be Prairie's sister, because they don't know Ciel personally, thus they would refer to her as such.
Likewise, there was no need for her to identify the Livemetals by their former names, as everyone now knows them by their current names.
Things won't get confusing, when the back- and story are explained clearly to the player.
The problem with explaining everything is that it doubles the amount of text and slows down the game to boring levels. The ZX-series explains everything needed to understand it, everything else is needless info to the situation at hand.