I can see your points but I always assumed that there where 'missing years’ between the two seasons.
When we were younger my brother and I would often play games to bridge the gap between the seasons.
It’s been a while since I watched MASK but the some things do cross between both shows Nash Gorey and Outlaw spring to mind. Terrorist groups do and can change how they operate look at the original IRA, some of them were released as known terrorists and some are now politicians and now seek to discuss their issues instead of using illegal activities.
Miles Mayhem took Venom towards racing as a way to gain profit instead of terrorist activities...that's one thing that bugged me about MASK why were Venom terrorists?? What were there motives?? Who funded them??
Mmm analysis ------
Miles a decorated Colonel before he created Venom, had a rich family like Matt Trakkers. Miles helped fund the MASK project with Matt (just a simple rich boy and tech head like his father) and Matt’s father, whom was given the power source of the mask by a tribe in season 1. Now we know Matts father died, was he killed in a suspicious accident in Miles' lab??
Going with that Miles (now even more of a greedy *******) knew what he could gain through the power source and mask technology thus he creates VENOM they cause havoc robbing banks etc... Matt is already a multi millionaire and has a lot of investments and probably has many businesses’s (ok I know this is thin ground) but I don't think Miles would suspect him being the man to run MASK.
Matt ensured all agents were civilian and with low-key jobs but with all the necessary qualities any good anti terrorist squad requires.
Season 1 happens
A big battle happens vehicles are destroyed Miles and the rest of Venom are defeated by MASK, arrested and then put on trial (all vehicles are then scraped and Miles personal fortune is then frozen). Due to the magnitude of Miles escapades the trial is public and Matt has to give evidence and at this point reveal who was behind MASK all along.
Due to some legal loop holes blah blah blah Miles is released uses Maximus Mayhems’ fortune to build/create Venom the race team cue new vehicles/Masks 'non violent'. Max not being a bad guy (I feel Max is very naive and has that blind trust one has with their identical twin) believes Miles changed his ways agrees to happily go along. Matt knowing that Miles is likely lying also reforms MASK and directly employs those that wish to become MASK agents once more thus them leaving there jobs.
Season 2 - the events of the last episode feel more important.
Well I know it’s full of holes but that's the way I always looked at it.
And what would 80's cartoons be without all those glaring obvious plot holes? Lol