What people mean when they say it’s “Zack coded” is that the date itself is stuff that emulates/replicates the kinds of activities Zack and Aerith did together. Like, I haven’t played Crisis Core but I’m pretty sure they’ve done those exact things together.Seeing a lot of discourse with how the dream date is interpreted. What do people mean its "zack coded?" Is that even a thing or just head canon stuff?
I don't think Aerith was using Cloud as a stand in for Zack, however the amount of Zack references in the subtext is hard to ignore. If it was a deliberate choice to bring in Zack references in the dream date, what is the purpose narratively?
As for the narrative purpose of doing this, I think that the last mutually romantic activities that Aerith did were the Zack, and so in trying to recreate them she might have been confirming Cloud’s feelings. Even if she’s not deliberately using Cloud as a stand in, I do think that she’s trying to recreate the same magic she felt with Zack, which only services when she says “at least I know where we stand now” at the end of it. Even if she does have any romantic feelings for Cloud at this point, Zack is the elephant in the room and they can’t ignore it anymore, especially since they’re both aware that Cloud was friends with Zack at the time of the Nibelheim incident.