@Degernase
I sometimes enjoy these in-depth talks too. However, I usually don't write that much, so this will be my last in-depth reply for now.
A normal homunculus is an artificial human created through alchemy. Depending on how well you perform the transmutation, it always gets as close to the human body as possible, with all its functions and mortality ( only the reproductive organ is missing). Created Homunculi never have a consciousness or mind of their own. In essence, they are a soulless husk, controlled like a puppet by the energy that the creator imbued into them.
There are a bunch of different versions of a homunculus, and Dion's opponent is one with a core. That homunculus has a magically modified body to specifically regenerate/heal back to the original state it got created. Furthermore, the body is designed to be completely in tune with the energy core and through that further enhances the homunculus, which enables its insane strength and regeneration abilities. The reason for that is that core can't produce any magic, and therefore completely focuses all its energy on enhancing the body. Vital parts like organs or complex body parts don't take longer to regenerate than the rest. So yeah, regenerating is as cumbersome as the amount of missing mass and decapitation would be 10%. The core always regenerates from the biggest mass of the body. Additionally, severed body parts would lose the core's energy and start melting away. Depending on how much energy the homunculus has, the regeneration speed varies. Usually, 1% of damage to the body, equals 5-10 second regeneration time. Losing vital parts that are needed for the body to function will incapacitate the homunculus until the core regenerates them. Though, for example, if the heart gets punctured by a blade and the blade stays inside the heart, the core would regenerate it in a way that the heart can still function even with the blade present.
Dion mentions in the beginning that the homunculus seems somehow different. That's why he decides to confirm some things before he goes all out.
After a while, he realizes that the homunculus has a human soul inside him and developed consciousness of his own, which is a big deal. So that's pretty much a unique situation Dion has to deal with.
Every other question like, why can't Dion out damage his opponent's regeneration abilities with his weapons? Why damaging vital parts of the homunculus doesn't amount to anything in his favor. Why can the homunculus use magic, and why does Dion do what he does pretty much gets explained or at least shown or hinted in the fight. (But maybe I was just bad at properly conveying those things.)
**Edit
There is one more thing I would like to mention, which wasn't really explained in my manga. Dion says after one of his weapons breaks:
"His aura further increased his magic resistance. I either need to use more blood or put more energy into my weapons to make them durable enough against him."
With that, I tried to imply that Dion can use less blood to create a weaker version of a weapon and imbue the object with his energy, making it stronger and more durable. So that it's on par with a properly created weapon. He usually does that when there isn't much blood available or when he tries to save up his blood for something else.