Would you say that going from the what I like to call "pseudo summit-fi" tier (e.g. Fostex TH600, Sennheiser HD 700, Beyerdynamic T90, Grado PS500e, Audio Technica ATH-W1000x,
HiFiMAN HE-560,
etc.) to the mid-fi tier is a downgrade if they were similar sounding headphones? Yes, it most likely would be. Even though the Sony Z7 and Fidelio X2 possess different audio characteristics, the Z7 would be an upgrade over the X1 due the fact that they are in entirely different tiers (keep in mind that there are exceptions, but this I do not consider this to be one of them because the Z7 sounds decent for the price). One could trade the Z7 for a different pair of cans in the "pseudo summit-fi" tier that have a similar sound signature to the Fidelio X2's and they would most likely be superior.
Does the Fidelio X2 hit above its price range? I would say yes, most definitely. Does it hit high enough to displace cans in the "pseudo summit-fi" tier? Probably not. I understand that sound signature preference definitely plays a very important role in determining whether a pair of headphones is an upgrade or not, but if we take that out of the equation (even though then we are comparing apples to oranges), the Z7 is and upgrade from the Fidelio X2.