No, he backed off during it. There was no clear sign of defeat there. Deciding to stop a battle and move elsewhere to continue fighting does not mean "you win". Only by game mechanics is that even a thing. If you're going by the game's logic of how we didn't get beaten earlier on, you can't say the same for the dungeon we ran either. Nidhogg's plot was "you killed my fam, I'ma make you suffer" and the entire plot of a previous FF already done. He practically was an edge lord the entire time, especially when he took over Estinien lol. GO FIGURE THE FAN GAME OF ALL FF'S WANTS TO MAKE SIMILAR IDEAS FROM OTHER FF'S???? HUH.
He admitted WoL has become stronger than him yes. Pretty sure he killed himself because he considered his part done at the time though. I haven't forgotten about that, the implication of death means they become without life, a body becomes a corpse. He became that ONCE so far. After we defeated him taking over Shinryu.
I mean, Elidibus specifically said something along the lines of Zenos coming around being unexpected. I'm almost positive Elidibus noped out understanding that he may very well be at his match if not just lose and he's the probably last remaining ascian left. He'd rather not take the chance.
And to your last question, it doesn't. But everyone is using "but we know we're gonna beat them" as their go-to for why Zenos is a bad villain... Meanwhile literally every villain we've faced thus far has had the exact same fate. so you could say all of them are bad for the same reason then. This is the first villain we've had in FFIV that has actually survived beyond death that wasn't an ascian (even though he's bordering becoming one). Why don't we wait and see what Zenos has in store and give him some room to be able to become something worthy rather than just killing off another villain as expected early. If there was anything that disappointed me in ShB, it was that Emet Selch seemed like he could've been a long term villain and well.... wasn't.
My belief is that Zenos is like as many have said, will have some form of interaction with Zodiark, and either way whoever ends out on top (my hope is on Zenos as again, I find him a perfect candidate for the final villain)....Will end up "defeating" the WoL in more than just a "got knocked down" sense like we have been in the past. Rather, in such a way that sets us back and makes people believe we're absolutely dead this time. Something to note, I never once said permanent.
TL;DR: drop this thread already so the creators/writers don't write up another villain out of thin air that had no relevance from these last 4 expansions(and will likely end up just being another end expansion villain) all because people on the forums whined about Zenos. Give the fker a chance now that things are getting spicy.
Also TL;DR: to be blunt, I disagree and find Zenos a great character to continue in the plot. No changing my opinion on the matter and at this rate I can see everyone's as stubborn as I am so ... Done I guess?