Yes, that's how I read it.
Sounds like the hardware of the buds are different.
This hang up is probably more to do with individual and not Apple? Let me take another example. Many car manufacturers keep the same model of their car and don't even give it an official version year nomination distinction. For example, Peugeot started producing the 405 in 1987 and there have been many, many, many iterations of that model over the years but they are all called 405 and aren't, as far as I know, distinguished by a year name. See:
https://en.wikipedia.org/wiki/Peugeot_405 And this is just one example. There are tons of products like that.
Perhaps. I'm not sure. But all that said,
I don't find it particularly unusual for Apple to keep the same name and still call it a generation 2 product. They're not forbidden from doing so and they would not be the first to have named a new version the same name. Again, there are countless consumer products like that.