Good question!
It's not really that Z3 is any better, worse, or harder to use than Z2 or Z5, but rather it is specifically designed for regular paint finishes that need the extra additives for regular maintainence. Clear coats don't require these extra additives, so there's no benefit to using them when Z2 is all that's needed. The Z3 formula has every bit of the shine and optical qualities that are inherent in Z5 and Z2, so there's no loss or tradeoff from using it. In fact, yes, you could use Z3 on clear coats if you like, but there's no extra benefit to the clear coated finish from doing so.
As I'm sure many know, Sal has over 30 years experience painting custom show cars and is familiar with countless paint systems and brands. This experience and knowledge is what drove him to create his polishes in the first place. He knows exactly what it takes to care for regular paint as well as clear coated paints. So, it's not that Z3 is any "better" than Z2, it's just designed especially for nonclear paint finishes, thus the reason it is still being manufactured along side Z2. Think of it this way, Z3 is just the "better" choice for regular paint, and Z2 for clear. As far as protection, the Z3 formula uses the same synthetic polymers that are in Z2 polish, just with the extra conditioners for regular paints. I've also heard many boat owners who use Z3 to protect their boat finish during the season.
Hope this helps!
:wavey