Historically, both Father Coughlin and the Rev. Gerald L. K. Smith were shady cranks and demagogues, but neither became full-on anti-Semitic racist far right types until a combination of Huey Long's assassination, attempts to stay in the spotlight with the advent of the New Deal, FDR derangement, inspiration from the rise of worldwide fascism and opposition to WWII set in- none of which are factors in the KR timeline, obviously. So while KR might reuse personages and names from OTL, not all of them have to correspond 1:1 with our world- the America First Party wasn't even founded until 1944, and isn't directly related to the more famous
America First Committee which Lindy and co. were a part of. So just as in this world Mosley and Mussolini are consider extreme far leftists and not particularly racist (???), you do not have to assume that Coughlin and Smith are far-rightists just as they were in OTL (which wasn't even until past 1938 or so anyway), and thus Long and the AUS are also far right. Maybe that makes them too neatly less villainous, but Kaiserreich is a world where neither National Socialism nor fascism existed, while communism straight up overthrew Western Europe, so far rightists have less time to chase after mythical Jewish bogeymen when there's syndies all over the place to bash. And it also assumes that the AUS is far right.
There's even someone on the Discord saying that Pelley didn't go bananas until after he published No More Hunger, and posters on the subreddit who say he only went racist because he met Hitler and modeled himself after him. To that I think that's too much revisionism, in the sense that Pelley and the Silver Shirts make a handy villain faction to fight, and that the man was a spiritualist mystic crank so you can pretty much make up any direction in which his ideology might go. At any rate, like Long, he is power-hungry and not in a way that would be subordinate to the other (unlike Coughlin, Smith, Townsend, etc. are) and so having the Silver Legion as an insurgent hardliner faction within the AUS makes sense.
There’s also the fact that you don’t become the darling of the South in the 1930s without at least kowtowing to the Lost Cause and the white-dominant racial power structure. Yeah, IOTL maybe Long might hav me pushed for black rights in his own state where he had a huge amount of control and could affect voting codes, but the whole South? No.
Long was probably not campaigning on abolishing Jim Crow but maybe he was just so good at economic populism that he was about to shunt away any sort of talk on race either good or bad, given that dealing with the Great Depression and fighting Syndies is a much easier topic to talk about.