It was a mistranlation, and he didnt actually say Eraqus.
This guy is subbing every cutscene and hasnt messed up once, so his translation is the one that is correct and makes more sense.
It's no mistranslation, i understand japanese and Xehanort DOES say Eraqus, Xehanort DOES notice it's Eraqus because of the way he started to speak in (he suddenly started refering himself with "waga" (old/wise man/woman way to say "I"))