Would Xykon become a demilich?

[Capt Spanner]

Also, bothers me somthing called half a lich is in fact much better than the whole of a lich. What's the logic there?

The logic is: "A demilich’s form is concentrated into a single portion of its original body, usually its skull." So it's a hyperconcentrated lich.

However, the 5th edition designers agreed with you. In 5th edition a demilich is a lich that couldn't absorb enough souls to sustain itself, so it falls into a weakened state.