Thanks for the details, this helps to clear things up a bit. The problem is that you are replacing the form on the checkout page rather than updating it. The eCommerce form in Form Builder does the country values differently.
Rather than add a new form to the checkout page you should be updating the existing form. To do this you need to make sure that you have the form tag selected and go to Insert > WebAssist > CSS Form Builder, then for the form type leave it at it's default. You should see a preview of how it will recreate the form in the preview window. You can update the style here and change form elements or validations that are applied to them.
I will make sure to record this issue with Form Builder though so that future updates make use of the country code rather than the full name in the country select list for eCommerce.