I am happy to report that eBay has finally corrected the erroneous post in their FAQs - New Jewelry & Watches Policy thread.
Link

Here it is:

"Correction to a Question/Answer from the opening post:

Q: Do I need to put "created" or "lab created" before the gemstone to be in compliance?

(Incorrect and current answer)
Sellers listing man-made diamonds (which have the same mineral composition as diamonds) can use the word diamond but must immediately precede the word diamond with one of the following words: created, man-made, lab-created, manufactured, simulated, synthetic. Sellers listing man-made gemstones must do the same.
Please also remember to list these stones in “Other” not in the diamond category.

(Correct answer)
Q: Do I need to put "created" or "lab created" before the gemstone to be in compliance?
Sellers listing man-made diamonds (which have the same mineral composition as diamonds) can use the word diamond but must immediately precede the word diamond with one of the following words:"created," "lab-created," "man-made," "synthetic," "manufactured," "laboratory-grown," "laboratory-created," or "[manufacturer-name]-created." Sellers listing man-made gemstones must do the same. Please also remember to list these stones in “Other” not in the diamond category."

I would like to take this opportunity to thank all the posters who participated in good faith in this discussion, and especially the posters who supported my position in this and other threads, including those who may have contacted eBay by email directly. Thanks for the team work!

Elias

Q: Is it true that if you accurately describe an item based on industry terminology, you don’t have to worry about the eBay policy? Or do you have to follow eBay policy by the letter?

Sellers need to adhere to the eBay policy when they are listing items on eBay. While it might be industry practice to describe or qualify a particular stone in a variety of ways, eBay policy limits sellers to the words they can use as qualifiers for different types of stones, where the seller must place these qualifiers and which categories the seller can place the items

Q: When a seller is listing a gold plated/ filled / electroplated item on eBay, do they need to spell that out in the item title OR is it OK to use gold in the item title and then fully spell out plated/filled/electroplated etc in the body description?

Anytime a seller uses the term “gold” with a qualifier in the title, the qualifier should be completely spelled out. If the item is not solid gold or silver or platinum and the seller would like to use the word gold or silver or platinum in the title, the seller may use a standard industry abbreviation for the qualifier in the item title but must spell out the qualifier (plated, filled, vermeil, overlay, electroplated, etc.) conspicuously throughout the body of the description.

Q: Where should I list my Moissanite/Diamond ring -- in the Moissanite category or in the Diamond category? What about a ring with a Diamond center stone with side simulated sapphire accents? The ring has both stones in it.

Sellers should list the ring in the category of the primary stone. For instance, if it's a 3 stone ring and the larger center stone is Moissanite, then list the ring in the Moissanite category. If the ring is a band of Moissanite/Diamonds and has more Moissanite stones than diamonds, list the ring in the Moissanite category. In the case of the Diamond center stone with simulated accents, list the stone in the Diamond category.

Q: Can we use the term lab-created diamonds?

If the product in question is a true lab-created diamond with the same properties as a naturally mined diamond (as described in full in the policy), then you may call it a lab-created diamond or use one of the other 8 qualifiers permitted by the policy. There are only a handful of manufacturers of lab-created diamonds as the process is currently rather expensive. Calling out the exact manufacturer of these lab-created stones is one way sellers can convey that their stones are truly lab-created diamonds.

If the product is a CZ and you wish to use the word "diamond" it must be immediately preceded or followed by the word "imitation" or "simulated" in the item title and throughout the description wherever the word "diamond" appears.

Please refer to the policy for more details on how to comply fully.

Q: Does this mean terms like 'diamond cut' or 'diamond shaped' cannot be used?

We understand that there are all sorts of ways the word diamond can be used. The purpose of the policy is to limit inappropriate use of the term diamond. We will use a number of methods to manage this and over time we will continue to refine the techniques used to ensure that only violators are caught.

Since it is not in eBay’s best interest to block legitimate listings that use these terms, we will be very careful in how we go about enforcing the new policy. However, if we see that you are abusing a term in order to get included in buyer searches, then we would take action. If, for instance, you would normally describe the cut as square-shaped or princess-cut, we would strongly encourage you to do so.

Our goal is to improve the buying experience. Buyers looking for diamonds are complaining that they must sort through too many non-diamond listings. In frustration, they sometime leave the site. This is bad for them and for the sellers. We’d like to keep them on the site and need your help. We will start with this interpretation of the FTC regulations. If we work together, we should be OK. If it doesn’t clean up the buying experience enough, we will need to take additional steps to do so.

Q: How can I list a red crystal that I want to describe as a ruby?

Sellers may use the stone name (e.g., emerald, ruby, sapphire) in the item title or description only if the word is immediately preceded or followed with the words "simulated" or "imitation", spelled out in full. Sellers must also include in the item description in equal conspicuousness to any other wording the composition of the item. Examples include, "plastic," "glass," "quartz," “crystal” and so on. These items may only be listed in categories especially designated for them like the "Crystal" category or in "Other" categories, not in the “Gemstone” categories.