My biggest problem with the Rebels is that they don't get the experience of feeding off neutrals and Pirates.
If the bad guy has an impenetrable defense and all you are doing is sending free pirate exp to him . . .
TEC Rebels vs. Loyalists is a classic RTS matchup, Earlygame/rush oriented faction vs. Turtle faction. In that matchup as Rebels, you win fast or you're pretty much screwed.
The advantage to Truce Amongst Rogues is that it lets you expand quickly and strike quickly, preferrably with a (friendly) pirate raid. It's highly unlikely that an earlygame Loyalist will be able to push back both your forces and a pirate fleet attacking in tandem, especially if you focus on the things that usually cause earlygame Pirate fleets problems (ie. Repair Platforms.)
If you allow the Loyalists to survive too long and tech up, then yes, they end up getting free food from the pirates as they throw themselves against the Loyalist defenses, and then eventually their Titan will probably go solo a Pirate Base for even more food from them.