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The KMT was simply a big tent party, because China has never been big on inter-party competition, only intra-party competition. Thus, the KMT simply believed that all political people should join it and no political people should be outside of it, and thus it contained Marxists (some of which would later split to form the CPC), liberals, fascists, some combination of these with Confucianism, etc.

Western democracy: Inter-party competition is good. Thus, you need multiple political parties.

Chinese democracy: Intra-party competition is good. Thus, you need one big tent political party. That was the KMT and is now the CPC. Other parties exist but must accept that CPC is the party of government if they are to operate. Some might see this as Bolshevik logic because similar arrangements appear in East Germany, but it's also Asian logic (you can find it, for instance, under Suharto's New Order, under which Golkar was the ruling party and other political parties like PDI and PPP could only exist if they accepted that Golkar was the party of government). A similar thing holds true in North Korea (WPK as ruling party, other parties can exist only if they accept that the WPK is the party of government).

This is why Chiang was so insistent on defeating the CPC before the Japanese. It is because the CPC splitting from the KMT violated the Chinese intra-party democratic logic: only if China was united under one party could it really fight off the Japanese.

As for Mao, he was simultaneously CPC and KMT for a time, because the split between the two wasn't immediate, and so many persons were part of both organizations until relations between them soured to the extent that they were forced to choose sides.

This was a time when Chinese intellectualism had made something of a comeback: KMT members would go to Germany or Italy and return promoting their kind of systems, KMT and/or CPC members would go to the Soviet Union and become dissuaded from Marxism while there and become anti-Marxists after returning, small fascist groups became prominent in entire universities, academic journals are seriously looking at fascism to the point of devoting entire issues to it, etc.

The differences between Marxists on both sides were ultimately trivial. For instance, one side (probably CPC) thought that China was feudalist, whereas the other side thought that China was (early-stage) capitalist. One side simply sees China as slightly ahead in the Marxist social progressionist narrative, the other slightly behind.

To avowed anti-Marxists like myself, this is purely pedantic and essentially irrelevant, since the end of feudalism and the beginning of capitalism surely overlap from a Marxist perspective anyway: a typical case of people who are almost ideologically identical perceiving a world of difference between them while everyone else looks on and sees them as the same.

If I have to pick a side, it would be with the KMT Marxists, since liberal democracy is capitalism's political counterpart, not feudalism's. A 'true' Marxist reading might be that Yuan Shikai represented the last (destined to fail) attempt to revert from capitalism to feudalism, but China had already transitioned to capitalism because of Westernization, especially during the last decades of the Qing, a time which during which there was an enthusiasm for all things Western coupled with a general devaluing of all things Asian, a phenomenon which also seemed to have earlier overtaken Japan.