So did Buchanan join Ross Perot in scenario? Or are we looking at a fourth party?
I guess I don't have a great answer on the butterflies electorally, but I'm basing most of my speculation on the meltdown when McCain almost put Lieberman on the ballot in 2008, and it was scuttled because of how much the spotlight would shift to the pro choice/pro life divisions, which would also serve to alienate swing voters. At the end of the day, the thinking from the McCain camp was even if we could get Lieberman on the ballot, the effort required would kill all the other messaging they'd be trying to get through. The 1992 IOTL was already a bit over the top on social issues, so the blowback could be even more severe here. At the very least, we're looking at a de-motivated base that's already really angry at Bush over reversing the tax pledge.
Here's a 1991 NY Times article discussing the Bush/Powell ticket that I found after my initial post, and they have some interesting thoughts. It's called the Dream Ticket, so it's not like Bush/Powell is a bad idea. The following paragraphs come after they discuss Powell's sky high popularity and appeal of that ticket.
A Bush-Powell ticket might even be considered a cynical exploitation of the war's political spoils and an implicit promise of a militaristic foreign policy. Republicans hardly need a general on their ticket to claim that they're tough and the Democrats soft on national security; they've successfully touted that line for two decades and now can cite as evidence the gulf war and Democratic opposition to it.
The Dream Ticket also would give greater credence to the Democrats' certain charge that Mr. Bush has no interest in or program to cure the nation's domestic ills. And black voters are unlikely to be swayed massively by one black on one Republican ticket, against Mr. Bush's poor record on civil rights issues.
General Powell campaigning as a Republican in 1992 -- how much bloom would that take off the military rose? -- might win over enough blacks who otherwise would have voted Democratic to swing a close election; but a close election doesn't appear to be in the cards. And Republicans who care about the black vote need a long-term party approach to serving blacks' needs and interests, not one spectacular gesture of questionable sincerity.
That part about Bush not really needing Powell on defense credentials is a good point, and turns out to be a bit clairvoyant in that 1992 turned out to not really be about foreign policy, if it would have been, HW would have crushed it. Powell doesn't do a ton of Bush a ton on what Clinton really started hammering him away on. And, at the end of the day, folks vote for the top of the ticket, not the bottom, so with any switch, you have to ask if it's worth the week of horse race/sausage stories about why the change was made and lose a few news cycles for negligible gain.