I just tried doing this for myself, and everything worked fine. Exact steps:
1) Created UNSCTest mod folder in my mod path
2) Copied GameInfo and String folders with 1.03 data
3) In GameInfo, made a copy of playertech.entity and renamed to playerUNSC.entity.
4) Opened playerUNSC.entity and changed raceNameStringID "IDS_PLAYERRACENAME_TECH" to raceNameStringID "IDS_PLAYERRACENAME_UNSC"
5) Saved

6) Opened English.str in the String folder, added: StringInfo
ID "IDS_PLAYERRACENAME_UNSC"
Value "UNSC"
to the end of the file.
7) Increased NumStrings on top by 1.
8) Started game, enabled mod, switched between selectable races on the game setup screen, and UNSC showed up as UNSC.