1978 KZ1000 LTD - Charging System Troubleshooting

You should be fine. Your AC voltage may actually increase with higher rpm. I think having a bad ground may be big contributor to your bike not even charging. With the lower AC voltage you will still get some charging allowing your bike to be ridden and not die on you.
Put the new reg/rec on with a better ground. Fire up the bike and measure the DC voltage at the battery at idle and 3000rpm.
You want above 12.6v DC when your are above idle.

actually... i just discovered hours later 
your 50v AC output is normal..
Your service manual from 1978 does not give a spec for AC output...
but the service manual for 1981-83 does.
and 50v AC is normal at 4000rpm.

You will eventually have to run a jumper wire from the brown wire to a better source of + voltage. The brown wire is how the reg/rec can tell how much charging should be sent to the battery.. with that much resistance the reg/rec may overcharge your battery.

there is a possibility that the brown wire connector was dirty before cleaning.
re-check the DC voltage
all connectors connected
bike running
meter set to DC voltage   
red probe on positve battery post
black probe back probing brown wire
should be 0.0v dc

Great News. I cleaned out the terminals and extended the black ground wire from the reg/rec to the engine ground point, and everything is working now! The battery is charging correctly while the bike is running. 

I can finally ride the bike after working on it for 2 years!

Thank you for the help everybody, I really appreciate it.

Good job!!!!!

Just curious as where you purchased the combo Reg/Rec. I have had at least three of these www.z1enterprises.com/rectifier-regulato...saki-kz900-1000.html from Z1E with bad crimps on the ground and hot wires. Check those crimps as the ones I had the wires pulled right out with maybe a 1/16 of bare wire