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Cloud is meant to be Zack's foil, not Sephiroth. It's literally in their name (Cloud Strife vs Zack Fair)
Cloud is no hero, experiences internal turmoil and multiple setbacks while Zack is the actual SOLDIER 1st Class, is overall positive and straightforward.
Sephiroth is theatrical and megalomanic in his own way, and he's still popular as a villain. The same cannot be said about Genesis, and making excuses about how he's intended that way or how people don't understand him doesn't make him any more likable.
Mainline Final Fantasy games have had development issues and mixed reception since 12. The international revision of 12 was well-received, but people forget that the vanilla version came out to mixed reviews.
I shouldn't even need to explain about 13's issues, or 14's launch with A Realm Reborn.
I should also remind you that the FF7 Compilation ended with Dirge of Cerberus, which was not well-received at all. The fanbase had plenty of reason to doubt whether another FF7 game would be any better when SE had nothing else to show for it at the time.
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