PS2 is not that unplayable broken and imbalanced as you make it out to be imo.
Smedley's own words on PS2 cannibalization btw: "
We continue to hire people for PS2 and it's got one of the largest teams in the company (far larger than H1Z1). We are 100% committed."
Whether that is true or not, there's also a potential positive side to this:
Both games possibly reinforcing each other. This could be both in attracting additional audience (PS2 actually got me interested in EQN and the market for zombie survival games is pretty hot atm, which could spin off to PS2) as well as shorter development cycles (a player fort building system in H1Z1 makes it easier to implement in PS2).
Not to mention the upcoming All Access system that makes it attractive for SOE players to check out SOE's other f2p titles.