There is nothing illegal about changing the markings on a Title 1 firearm with the exception of messing with the serial number.
So from a legal standpoint there is nothing that prevents you from remarking a Zenith MP5 clone to say "MP5" on the top rib. However you need to do it before submitting the F1 as it is illegal to alter or change any markings on a Title II/NFA firearms.
From a practical standpoint you will need to remove the finish, tig weld over the old markings, re-contour the top rib, re-engrave, and then refinish.
I have personally done a similar operation on an LSC flat to get rid of the "spider" marking and it was more work than I expected.
There may be a limited subset of gunsmiths out there who have the ability and willingness to remark a Zenith/MKE gun to a deutsche model designation. (Personally I see it as not much different than remarking a HK94 to a MP5 as neither a Zenith or a HK94 is really MP5 and remarking HK94s or SP89s to MP5 is extremely common)
The ATF should accept MP5 as the model if the designation has been changed and now reflects the current model engraving on the firearm. I personally have approved SBR applications that have "MP5" as the model designation for both converted HK94s and Form 1 builds from flats.
In regards to the reverse stretch, all of the MKE guns I have seen have a "K" rear end, so it would be a monumental amount of work to convert a Zenith K variant pistol into a reverse stretch, which is a full size MP5 ass end with a K front end. You would effectively have to cut and weld a full size MP5 rear onto the Zenith K host.
Pic of a MP5 reverse stretch with a K front and the ability to take a normal full size MP5 stock. (not mine)