We think of $U$ as $U = y \times (x * z) \cong C_2 \times (C_2 * C_2)$.
In any finite factorgroup $\langle x,z\rangle$ is isomorphic to some dihedral group, say $D_{2n}$. Either $y\in\langle x,z\rangle$ in the factorgroup and we are done, or the quotient is isomorphic to $D_{2n}\times C_2$, which is isomorphic to $D_{4n}$ whenever $n$ is odd.