It's part of the schizo tone of this game that when you get to Disk 3, you look back at Disk 1, and say "what happened?"
Even if Disk 3 was all good, it's so very different from Disk 1 in...every way. Even the pretense at the mercenary/military Garden thing has completely fallen apart. That happened at the start of Disk 2 though with Squall and them no longer taking mission assignments which was a good chunk of Disk 1.
Anyway...I guess my favorite Disk might be 1? 2? It's hard to say. It's not 3 or 4.