Char's Counterattack is a good move, but it's primarily a movie about Quess and Hathaway. Amuro and Char are largely second fiddle. The iconic legends who have been built up so much in the eyes of the rest of the world that they can't be anything but symbols, and what they want themselves is now largely irrelevant.
As far as Char regressing from Zeta, I think it's largely down to just how done he is with everything by the time of the movie. The fighting hasn't stopped at all and humanity is still clinging to the earth, so he plays his role in putting an end to everything. And it's clear that Char is largely putting on a performance in the movie whenever he is in public. In his private scenes you can really feel the weight of what "being Char Aznable" is doing to him. Amuro and Char, for all that they've been through, are unable to escape the past, and they die rehashing a fight that they should have put behind them over a decade ago while arguing about a girl who died when they were teenagers.