For those who have not completed Xenoblade Chronicles 2, this page may contain spoilers regarding the plot. Discretion is advised.
Flesh Eaters are a special kind of Blade that were fused with humanoid cells in an attempt to give them unique abilities. Flesh Eaters were mainly a product of the lost kingdom of Judicium. They are able to wield their own Blades, and have their own Core Crystals, as well. They are also able to stay manifested after the deaths of their own Drivers. However, the process of creating a Flesh Eater is rarely successful, with many ending up like Cole, losing their immortality and gaining aging bodies.
There are similar hybrids, known as Blade Eaters, who are humanoids who absorb their Blades' Core Crystals. The technology is only found within the Indoline Praetorium.
The term Blade Eater is something Zeke seems to have come up with himself on the spot after revealing it to the party, however even though Zeke seems to be the first to coin this term, Mikhail states he is Blade Eater as if it is a common phrase.