I may be at odds with others, but to me it's damaged.
Part of that is based on how I feel about collecting Rolex, which seemed to be the center of the faded dial fad. The basic Rolex dive watch has undergone only minor changes in all the years it has been on the market. So how does one differentiate vintage from modern? Setting aside the handful that heralded new features (crown guards, etc), collectors seem to look to minor differences (Comex, red lettering, etc). In that environment, the faded dial is a rarity that shows the age of the watch and offers a depth to the standard black dial.
For vintage Zeniths, there are many different EP models that make up the universe of must haves for collectors. These watches range in case shape, material and colors. It is these characteristics that define the watch as a vintage EP and what I want to see in my vintage Zeniths.
While I appreciate that models over 40 years old will show wear, I view discoloration as negative (think faded blue subdials or tachy rings). Your model happens to have uniform fading that leaves the watch with a unique look, but it is not how the original should look so it is damaged in my eyes.