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GM's standard alpha-numeric production coding system has been in place since 1963. All engine codes begin with "L" and they don't repeat codes for typically 20-30 years. Other options follow a pattern - transmissions are "M", suspension componets are "F", and so on. Z-prefix options are "magic" because they denote "special performance equipment packages" that often combine various engine transmission, suspension, and brake components in an option package that are the best choice for "heavy duty service", GM's euphamism for racing, like the 1963 Z-06 special performance equipment package.
The current Z51 is a "package" because it include both suspension components, which are called FE3, with a power steering oil cooler.
LS2 was a logical follow on to LS1, and it's probably no coincidence that LS6 and LS7 are legendary high performance engine codes from the early 1970s as GM knows the marketing value of production codes (like Z06) amongst enthusiasts who understand Corvette history.
The only change in the system is that the early codes, which consisted of one letter and two numbers had a dash like "L-76" and "Z-06". Early RPO codes with two letters like "LT-1" included the dash, but it was eliminanted sometime thereafter, so when this code was reused again in the early ninties, it was written "LT1".