There weren't enough black survivors for a black republic. I mean if we were to compare the killings in the Turtledove books with OTL, it's far easier to identify someone who is black by just looking at them compared to someone who is Jewish. Then consider the restrictions on black people even before Featherson came to office. The conclusion a number of characters seem to draw in the final book is that to some extent the CSA is rotten to the core with everyone either explicit or implicitly behind Featherson and all he stands for. Given the previous wars annexation might seem the only logical way to prevent another war of revenge.
In fairness, Nazi Germany IOTL had a lot more resources to spare to kill 6 million Jews, and an additional year, neither of which the CSA had. In fact 1944 was the year with the highest kill rates in the death camps due to sheer efficiency of the system. In 1944 in TL-191, the CSA would be in the same position that Germany was in OTL in 1945 if we’re being realistic. I’d wager there’s still a few million survivors from the Population Reduction so a Black Republic could be in one of three places: Chihuahua and Sonora (disconnected from the rest of the former CSA due to Texan independence), Louisiana and Arkansas (the only two states not to vote for Featherston in 1933 and undoubtedly suffered because of it) and Cuba (due to the high level of resistance against the Population Reduction).
As far as annexation into the USA goes, I don’t think it’s likely the US annexes all of the Confederacy when they also planned to annex the British and French Caribbean. I have no doubt the African-Caribbean majority population there would not want to be part of the same country as the former CSA. And then there’s holding down both the Confederacy and Canada through military force. The massive levels of resistance would cause costs of the American occupation to skyrocket. Hence I agree that annexing the upper South (Houston, Kentucky, and Seqouyah) plus Tennessee due to a likely high percentage of pro-Union anti-Freedomite people (and anti-Population Reduction by extension), particularly in the eastern half of the state. So annex those four states, grant Chihuahua/Sonora, Arkansas/Louisiana, and Cuba independence, and establish a Morgenthau Plan analogue for the rest of the CSA.