Cell's Regeneration Plot Hole Explained

 

In the Buu saga, Trunks knocks over Piccolo's statue and shatters it. When it changes back, Piccolo is in pieces. But he quickly regenerates, and says "doing so is nothing, as long as my head remains intact."

This is probably because the Namekian brain controls the regeneration process. Kill the brain, kill the Namekian.

Cell regenerates "like Piccolo does" because he has Piccolo's DNA. However, Cell's anatomy differs from a Namekian. Cell may not have the same type of brain most humanoids do. Instead his brain functions have been packed into a tiny core that is in the middle of his head, probably in a shielded pouch that provides extra protection. That core serves as Cell's nerve center, it's probably where all of his cognitive functions, memory, involuntary functions, emotions, calculations, etc are all processed.

I think that one cluster of cells that Cell called his "core" is basically one tiny organ that has all the functionality of an entire brain, including all the glands and different lobes, etc. So, yeah. As long as that thing survives, Cell's "brain" survives, and he can keep regenerating.

Why did he regenerate when Goku blew away the upper half of his body.

Well, even though that part of him was destroyed, there was a ton of biomass remaining. Cell's pelvis and legs were still there. It's possible Cell's entire body is composed of something like stem cells, where the building blocks to generate any part of Cell's entire body is stored in each strand of DNA. It's possible when that much biomass is remaining from Cell's body, that it can regenerate itself without the core, because it will rebuild his entire body before it runs out of energy