That was an "interesting" gimmick to be sure
Slater was a natural heel, one of the best from the territorial era. He was a good face, but only when starting as a heel and getting a good bump from the turn.
It's 1986, and I would have loved to have been in the creative meeting that produced this gimmick.
So Slater could have been a heel as the Rebel and it would have made sense. He could have challenged Hogan across the country, been a despicable heel and faded away after a good run. However in that era they could not pull that off and this why, Slater would have been cheered loudly in the south, guaranteed. And back then Vince would have frowned on that.
By making him a face he made the easiest choice to avoid the conflict inherent with the gimmick but he also cut the balls off of the gimmick.
Slater was received with lackluster response from fans everywhere. Mainly because people not from the south did not want to cheer a rebel flag wearing mid carder in 1986. If it were the 1970's in the midst of the Southern Rock era, maybe....but even southerners were apathetic to Slater because it was kind of weird.
Honestly as a southern guy myself, it was hard to cheer for him. We all knew he was going nowhere, and he "represented us", so out of all the awesome talent we had from the south, they picked Dick Slater? Seriously? Heck was Bob Armstrong busy?

A face Dick Slater with that flag on the shirt, and the ridiculous bandana? Not to mention the fact that while many of us are proud of being from the south, and believe you me, I am.
It's hard to justify emulating a war that cost hundreds of thousands of lives to uphold the idiotic practice of slavery....and I don't want this to start a debate on that. We were wrong, fact.
However....so you make him a heel, make him despised by people everywhere...and guess what? He's cheered wildly, like a hero in the south. There is just such a chip on the shoulder sentiment down here, in spite of the fact that most of us know we were clearly wrong, we would have cheered the guy as one of our own.
Vince made the right decision to make him a face, but it made the gimmick suck. He made the wrong decision in even using the gimmick.
Anyways, the gimmick was just so profoundly ridiculous it is one of the most interesting topics in wrestling lore to me. "The Rebel" Dick Slater works in Mid Atlantic, works in Georgia, works in Memphis, works in Florida, works in World Class, works in any southern territory, but not in a national promotion.