Unknown Z-Wave device: How to proceed?

No, bad idea, this installs the stable zwave binding as you already found out. Installing through PaperUI oder putting the binding in addons.cfg is the same thing.

To fix all your attempts make sure you uninstall the current binding, remove it from PaperUI, remove it from addons.cfg, clear cache and tmp, restart openHAB, check through Karaf if no zwave binding is available.
Download the latest 2.5 zwave snapshot binding, put it in your addons folder, check through Karaf if it is in “Active” state.
Now there could be two problems if your controller does not show up or your devices are not working: either the serial driver is missing (as a workaround just install the Serial binding, this will install the serial driver dependency) or sometimes the xstream dependency could be missing due to all the recent changes to the openHAB core and the Build system changes, this one can be fixed with:

Now reinitialize your device in question and you should be good to go.