Oh boy this brings back a lot of memories. Haha. The idea is really fun to tinker with, updating chibis from pre-existing parts in the game, but I personally think it looks tacky if you blend styles. The arms from the APZ model stand out to me. No offense, just some constructive criticism.
Secondly, Cloud doesn't have two metal arm bands, only one, as well as his gloves being different, but I don't know if that was even portrayed in the original battle model or not.
Also, I don't know the specifics, but I thought APZ didn't want others to redistribute his work, edited or not. His model may have been taken down. But, it is still his intellectual property, at least the arms from that model are. So I don't know if you can release or not. Not really my place to tell you to take it down though. ^_^.
That all being said, your model is turning out quite decently so far. I would say make the eyes a little taller. The eyes are too small to be chibi. Chibis are cute. ;P.
But, again so far so good, a little tweaking, a little bit more mixing and mashing of parts, and it might go somewhere!
Good luck, and hopefully you'll do more than just Cloud, cause to be honest Cloud has been painfully over done. :O.
Thanks for the edit though, and thanks for the effort.
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Good Luck,
Mendelevium