Some general points:
1. Terra DOES look like Xehanort(to some degree though it's up to opinion). The hairstyle isn't exactly the same, of course, but it's still pretty similar. And it's not just the hairstyle either, in general the facial features match pretty well. If you compare the forms of Xehanort to Terra, Xemnas' hairstyle is the one that most resembles his. Funnily enough, Xemnas also happens to be the form of Xehanort who shares the most similarities with Terra in general.
2. Hairstyle is not the only thing the two have in common. There is the paralel with Riku (with whom Terra is connected somehow), Xemnas calling Aqua's armor an "old friend", Xemnas wearing knight-like armor in the final battle, anger and hatred, the insignia Terra, Aqua, and Ven wear on their clothing looking similar to the Heartless symbol, etc. Even if the hairstyle were all that he had going for him, it's better than what, say, DS has; a mystery factor, which could be completely unrelated to the identity of Xehanort. However, Lunar isn't exactly on the wrong track saying MX is Xehanort. MX is also very similar to Xehanort, arguably even more similar to him than Terra is (especially perhaps to those who think they don't have much in common).
3. The KH2FM fight with LS is not a factor to consider, because Nomura said it was unsure whether it was Terra or not. I guess he must have some relation to him since they have the same armor and keyblade, and LS mentioned Aqua, Ven, and (Master) Xehanort, but still, it doesn't matter, either because it's non-canon or because the fight just generally isn't important. The only important thing about the battle is what LS says before/after you fight him.
4. It hasn't been confirmed when the battle takes place, if it happened.