Nope.
Sephiroth is dead. And that is not one of the clones, its Jenova itself. Both of these facts come from the Ultimania guide, which is a definitive source from Square, but there are parts of the game that if you pay attention to you will notice.
For instance, its mentioned in the game that the damage done to the containment unit Jenova escapes from is done from the INSIDE not the outside. There wasn't a clone that helped Jenova escape. She just left.
And why does it take the form of Sephiroth? Because Sephiroth is in control of Jenova. Its his will, so he appears how he likes.
Sephiroth is dead in the sense that his body is dead, it dissolved in the lifestream, but his strength of will allows him to refuse to be absorbed into the lifestream, and his connection with Jenova gives him a lot of influence outside of it as well. The body you see in the North Crater is his dead body being reformed in crystallized Mako by his will.
EDIT:
Also on the Tifa not calling Cloud out thing: She isn't entirely sure exactly what happened. She was seriously injured and remembers Cloud being there at that last minute before she passed out from her wounds, but isn't sure what was happening before, or how he knew all the things he knew even though she didn't remember him there.
The Ultimania Omega guide was outsources by Square to StudioBentstuff, who while working under SE's blessing, didn't have anything specifically written out for the guide by Nojima, Nomura, or Kitase. Neither is there anything to say that it was proofread by any of them.
In many ways, a lot of info in the guide directly seems to contradict things said in interviews by the creators.
It was released long after the original game (2005), after SE had produced loads of silly spin-off products that conflict with the original game's narrative, and even ret-cons previously established canon.
Furthermore, the guide was never released in English, and only fan-translated by people who had no means to communicate with the original writers for clarity, which is why most of these translations contain very large analysis and translator's note sections.
As a person who speaks, reads and writes Japanese, I can tell you that most(if not all) if these translations takes pretty large creative liberties with the source material, which is already written pretty vaguely at times in order to facilitate as much of the Japanese fan community as possible - a good example is how the guide treats the romantic sub-text between Cloud, Tifa and Aerith to avoid any clear implications that would lead to certain fans thinking of themselves as being "right"(a very normal trend in almost all Japanese media that involves open romance settings).
The guide pretty much states that Cloud and Tifa admit their romantic feelings for eachother at the end of the game, but Nomura has stated in interviews that he doesn't really care all that much about the romantic sub-text, and doesn't really know to this day where he intended everything to go romantically speaking. He made it vague to allow players to think for themselves how they wanted to interpret Cloud's feelings.
In either case, I know most people won't agree with this, but I only regard the original, Japanese FF7 as canon, and everything else as essentially fan-fiction.
FF7 is FF7. Everything else is pretty much irrelevant, because it was all produced after the fact, after the original team behind the game was fractured, and done in interest of catering to fans, new demographics of fans that joined the franchise after Advent Children etc, and making sure that there would be room for more spin-off material.
No clear text in the game refers to the Sephiroth you're chasing as Jenova, and most clear text seems to heavily imply the opposite. Similarly, no clear in-game text states that Jenova broke out on her own.
In the original FF7, president Shinra is killed with the Masamune, which wouldn't have been there if the Sephiroth that killed him came from inside the Jenova container - unless we're to assume that the sword was kept inside the Shin-ra building and then retreived, or that Jenova can form her body into hard objects as well (both assumptions would be unfounded as there is no in-game text to support either).
If Sephiroth's body dissolved into the life-stream, why is his body shown intact in the North Crater? Your explanation for this, again, is never stated in-game canon, but is an analysis of events based on how you interpret what you know of the Ultimania Omega guide.
The "Sephiroth is Jenova" analysis simply doesn't fit into the original narrative as is, without forcing the player to deny the events that clearly don't fit with it, and demanding that the player rely on outside-game sources to "explain" how things supposedly hang together and make sense.
Looking just at FF7 in and of itself, and applying occam's razor, pretty much renders this analysis unlikely.
Your interpretation of events is even more problematic if this thread is trying to argue for the simplicity of the FF7 plot. You can't really argue how the FF7 plot makes all that much sense, if you need to read an outsourced guide made 8 years after the release of the game to understand what is actually going on.
Still, as I said, I could be very wrong. I don't think we'll ever know beyond a shadow of a doubt though, due to the fact that we will probably never see the three main producers and writers come together to clarify the plot, and because the IP is now owned by SE, who has shown time and time again that they're incapable of treating any Squaresoft IP with respect.
Side-note though, I think you're entitled to your opinion, and I think your prespective is far from the most unreasonable read of the narrative that one could do, compared to some of what's out there. I think you're overboard if you think it's an "objective fact", and that it's objective because English fan-translations of the Ultimania guide seems to agree with it.
I've seen many people voice the sentiment that the Ultimania is as canon as it gets, but there is something extremely worriesome with the idea that a guide created 8 years after the original narrative, that doesn't always match up, is supposed to be more canon than the narrative that it's supposed to be a guide to...
Well to be fair aren't all RPGs, especially JRPGs, like this. That's one of the reason why casual gamers don't play them, too much hard work to learn more about the characters and the world they're in. Sure it's easy to pick up a fighting or shooting game and go "Yeah! I'm beating up/shooting stuff!" and still be happy with what they have. Were as with RPGers we're playing an RPG for the story and characters. Most of the super good stuff in these games were found outside the main story and players who took the time to explore were reward for this with extra story development, extra bosses, or super weapons. Sure this was harder in the days before the internet and your parents didn't want to shelf out 20 bucks for the guidebook, but that's what made the find all the more special. When you took the time to explore and figure out how to unlock another portion to a sidequest and when you did figure it out, you felt good about it. That self-satisfactory feeling of knowing that you figured out a problem with little to no outside help. So yes, some of this stuff is hard to figure out and can be annoying too, but it's all in the fun and most of the time worth the effort to do it.
Except that this isn't true. FF has since it gained mainstream appeal(pretty much since the success of the first game in Japan), it has almost always been designed with a mainstream audience in mind. I guess it depends on what you mean by casual gamers, but in this context I think it's safe to say that you're talking about regular gamers, not people who mainly play Wind-runner and Puzzle dragons on their Smartphones.
I agree that rewarding players for exploring is both important and an entertaining aspect of a game, but there is a problem if you need to go out of your way to understand essential points in the narrative, which make the entire thing come together and make sense.
The plot-points I refered to aren't simply side-quests, they're intergral to being able to put together the plot of FF7 in such a way that it makes sense, which is probably the reason why so many people either didn't get the plot, or thought that the plot didn't make sense.
If you don't see the Crisis Core flashback, then the rearrangement sequence of Cloud's memories happens in a vacuum, and that seriously damages the plot. If you don't know the backstory about Gast, Hojo and Lucrecia, that really damages the character of Sephiroth and his story-arch.
If you don't know the details surrounding Jenova's ascent, and the ancients, that damages the entire basis for the plot.
It's still possible to understand the plot if you pay close attention to the dialogue, but if they had made these scenes obligatory instead of optional, the game would probably have been more favourably recieved in later years than it has.
Even if they did this, there is nothing to say that they couldn't have made some other additional optional content in either case. I mean, FF8 had 4 disks. It's not like they didn't have more space to work with.
The entire sequence of Nibleheim past she didn't say anything. Including the time she was touring Zack and Sephiroth. A few weeks/months passed by since then -before- the entire Nibleheim attack. There's no way she's unsure about that. Even Sephiroth called her out on it in the Nibleheim sequence and used it against Cloud to fool him that Sephiroth can control memories of people who are also unaffected by Jenova cells.
Actually, several years has passed in the game since the Nibelheim incident til the point where Cloud relates the story of what happens. The Nibelheim incident is supposed to have taken course over a period of about 3-4 days.
And yes, as I said in my last post, it's quite possible to be unsure about events that only occured over the course of a couple of days, when those events ended with your home-town being burned down, your father killed, and then you getting cut down by a giant katana which nearly kills you.
Post-traumatic stress alone could scramble Tifa's brain beyond repair in any reasonable universe.
Also, consider the fact that Tifa didn't know Zack, has spent the last months with Cloud who now wears Zack's clothes, carries his sword, knows most of what happens in the Nibelheim incident as if he was there (he was, but not as a 1st class soldier), and now he is strong to the point that his 1st class soldier story makes sense, which means that Tifa has no reason to think that Cloud was there as a Shinra Guard rather than as a 1st Class soldier.
All this added together makes it reasonable to assume that Tifa herself might be doubting her own memories, thinking for instance that the Zack she met, was actually just Cloud, and that she's just confused about the haircolour, or something to that effect, due to PTSD or due to her wounds.