Proof.
By Lemma 77.6.5 the module \mathcal{G} is universally pure relative to B. In order to prove that F_{zero} is an algebraic space, it suffices to show that F_{zero} \to B is representable, see Spaces, Lemma 65.11.3. Let B' \to B be a morphism where B' is a scheme and let u' : \mathcal{F}' \to \mathcal{G}' be the pullback of u to X' = X_{B'}. Then the associated functor F'_{zero} equals F_{zero} \times _ B B'. This reduces us to the case that B is a scheme.
Assume B is a scheme. We will show that F_{zero} is representable by a closed subscheme of B. By Lemma 77.7.2 and Descent, Lemmas 35.37.2 and 35.39.1 the question is local for the étale topology on B. Let b \in B. We first replace B by an affine neighbourhood of b. Choose a diagram
\xymatrix{ X \ar[d] & X' \ar[l]^ g \ar[d] \\ B & B' \ar[l] }
and b' \in B' mapping to b \in B as in Lemma 77.5.2. As we are working étale locally, we may replace B by B' and assume that we have a diagram
\xymatrix{ X \ar[rd] & & X' \ar[ll]^ g \ar[ld] \\ & B }
with B and X' affine such that \Gamma (X', g^*\mathcal{G}) is a projective \Gamma (B, \mathcal{O}_ B)-module and g(|X'|) \supset |X_ b|. Let U \subset X be the open subspace with |U| = g(|X'|). By Divisors on Spaces, Lemma 71.4.10 the set
E = \{ t \in B : \text{Ass}_{X_ t}(\mathcal{G}_ t) \subset |U_ t|\} = \{ t \in B : \text{Ass}_{X/B}(\mathcal{G}) \cap |X_ t| \subset |U_ t|\}
is constructible in B. By Lemma 77.6.3 part (2) we see that E contains \mathop{\mathrm{Spec}}(\mathcal{O}_{B, b}). By Morphisms, Lemma 29.22.4 we see that E contains an open neighbourhood of b. Hence after replacing B by a smaller affine neighbourhood of b we may assume that \text{Ass}_{X/B}(\mathcal{G}) \subset g(|X'|).
From Lemma 77.6.6 it follows that u : \mathcal{F} \to \mathcal{G} is injective if and only if g^*u : g^*\mathcal{F} \to g^*\mathcal{G} is injective, and the same remains true after any base change. Hence we have reduced to the case where, in addition to the assumptions in the theorem, X \to B is a morphism of affine schemes and \Gamma (X, \mathcal{G}) is a projective \Gamma (B, \mathcal{O}_ B)-module. This case follows immediately from Lemma 77.8.3.
We still have to show that F_{zero} \to B is of finite presentation if \mathcal{F} is of finite type. This follows from Lemma 77.7.4 combined with Limits of Spaces, Proposition 70.3.10.
\square
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