@ZionOAS I think you're pushing too hard about some things, like with the word malfested, yes, it was "invented" by SoulCalibur V, but it's retrofit into the other games as a general-use term for those influenced by Soul Edge. It's not changing anything to use the term all over the place, it's just that they didn't have the foresight to make a term back from the start.
As far as I can explain the sword spirits, in the simplest terms, I guess:
Elysium = Soul Calibur
Inferno = Soul Edge
Those are the absolutes, and nothing can change this. Elysium was "invented" by SoulCalibur V, in the same way that malfested was, but she's still the sword spirit of past, present, and future. Her voice was first there in SoulCalibur IV, as an unidentified entity, but it's probably just that she was shy or kept to herself or something, being more subtle than Inferno. She doesn't have a "base form" that we're aware of, yet, like Inferno is the flaming skeleton. It would be assumed she is some sort of a water spirit.
Inferno has different levels of appearances, being the entity itself, a spirit of fire/skeleton, which can wield the sword of its own will (SoulBlade, SoulCalibur, SoulCalibur II, SoulCalibur IV, SoulCalibur VI), or possession of Siegfried (SoulCalibur, SoulCalibur II, SoulCalibur VI), the unknown entity that Zasalamel chose (SoulCalibur III), or Raphael/Pyrrha (SoulCalibur V). Inferno has appeared, quite openly, in every game.
Night Terror, on the other hand, is not one of the spirits. It is a monster, an entity that was created by Zasalamel when he was attempting to use the power of the two swords to end his immortality. The essence of the two swords fused with the remains of the defeated false Nightmare of SoulCalibur III, and thus, Night Terror was born, with the familiarity that is Nightmare, with Soul Edge as the dominant force, with most/all of the sword reforged, it became a being of absolute power.
It's in that unfortunate grey area of canon, because when it comes out in the story mode, it obliterates Zasalamel and becomes the final boss instead of Abyss, which also may or may not be canon in itself, because neither Night Terror nor Abyss made a return in SoulCalibur IV's story or were mentioned, aside from Nightmare's 2p looking similar, as well as being the inspiration for the Fully Malfested CaS race. But New Legends of Project Soul did confirm that Night Terror still exists, sealed away in the Astral Chaos, still wielding absolute power, to the point where even Algol avoids it at all costs.
@LisaK @TresDias @ZionOAS I don't see the two being one in the same as being any more or less problematic as Amy and Viola. It's not like they would have to be "replaced", either, considering how both Raphael and Nightmare were characters in SoulCalibur V. Grøh and Z.W.E.I. could also both be on the roster, by that same token, yet actually have the story reveal that they are one in the same, like they were going to do with Raphael. I could be wrong, it's definitely possible that I'm wrong, but if I'm right, I called this so hard that I'm going to probably have celebratory cheesecake or something.