Ah, you are correct. I'll edit to reflect that. I took into account the start of 2.0 instead of 1.0 by mistake.
Edit: and to answer your edit question, I honestly find it to be out of place in terms of the narrative. There are many more ways to say "I remember you now" than by showing a vision you appearing out of thin air (with the same light visual effect of a dead sin eater no less) and "handing" Cid his goggles.