How I can respond to this major revision?
I'm not really sure what the question is here. It seems like everyone agrees that the proper name is Y, so the only thing you can do is change it to Y and resubmit.

My guess is this will clear up the confusion of the second reviewer.  And if you don't change the name he will surely reject your paper, because after all it isn't about X.  But it's really irrelevant: you know what the right thing is to do, and you have to do it, even if the consequences turn out to be negative.

Yes, it's possible your paper will be rejected. That is always a possibility whenever you submit a paper for publication.  Get used to living with it.