It obviously proves that $z=1$ is possible, but how does it prove that
$z=0$ is possible?
No, that is not what the proof you cite is proving. The proof is not saying that $z=1$ is possible, nor is it saying that $z=0$ is possible. In fact, the proof you cite in your second paragraph is the proof of the following statement:
If $x^3 = x^2$, then $x=0$ or $x=1$.
This statement is proven using contradiction, i.e. by assuming that $x\neq 0$ and $x\neq 1$ and $x^3=x^2$, and deriving a nonsensical statement out of the assumptions.
Probably, the proof does not explicitly state that $0$ and $1$ are solution because verifying that is trivially simple. Nevertheless, I would write that in the beginning of the proof just to be sure.
In fact, I would rewrite the proof significantly. For one, introducing two variables, $x$ and $z$, for the same thing, is just confusing. Second, the proof of contradiction is not really necessary and is just obfuscating the point. Finally, as mentioned, the proof really only says that there are at most two solutions, not that there are exactly $2$ solutions.
So this is how I would write it.
Because $0^3=0=0^2$ and $1^3=1=1^2$, it is clear that $0$ and $1$ are
both solutions to $x^3=x^2$.
Now, we will prove that no other solution exists. We can prove this by
showing that any solution to the equation is equal to either $0$ or
$1$.
Let $x$ be some solution to the equation. Then, $x^3=x^2$, which means
$x^3-x^2=0$, which further simplifies to $x^2(x-1)=0$. Because we know
that the product of two numbers is $0$ if and only if one of the two
numbers is $0$, this means that either $x^2=0$ or $x-1=0$. In the
first case, we have $x\cdot x=0$ which is only possible if $x=0$. In
the second case, $x-1=0$ implies $x=1$. So, if $x^3=x^2$, then $x=0$
or $x=1$, QED.