The green wire is not ground.
The 1977 Kz650 uses an excited field alternator. The green wire is power to the field coil.
You can get a combination regulator/rectifier, but it is just a separate regulator and rectifier stuck together, so you can do fine with separate units.
The regulator is powered by the brown wire and regulates power to the green wire which powers the field coil. The black wire on the regulator is ground.
The aftermarket regulator shown in the OP's photos will need some sort of diagram to know what the wire colors mean. It appears to be a 1-phase shunting regulator for watercraft (Kawasaki Jet Ski JT750). It cannot be used on the 1977 Kz650, and I would not use it on any motorcycle. The wires look to be for light duty (watercraft don't need a lot of electrical power).
There should really only be 3 wires for the 1977 Kz650 regulator, as is seen in the factory diagram... 1 Brown, 1 Green, 1 Black.
Oregonmotorcycleparts.com has the regulator specifically for your bike. I would get one from them, they are not expensive.
www.oregonmotorcycleparts.com/vregulators.html
You want model VR3-KZ.