Well it either breaks down when hardliners in North Korea realise their grip on power is weakening or the NK administration is weakened until it is subsumed into the SK one.
But remember this was also a period of South Korean right-wing authoritarianism. Things have certainly reversed but in the 70's a person could make an argument that North Koreans had a better life with more freedoms and not be laughed at immediately.
Ultimately I feel that such a confederation plan might have been an entirely positive thing. It would have led eventually to the reducing of the influence of the military on both sides of the border and an increase in the influences of cultural and economic ties. It might have led to South Korean workers getting their rights enshrined and North Koreans might have received greater autonomy. Of course, the move was likely a highly cynical political jab from the North Korean leaders, knowing that the South Korean right-wing wouldn't have accepted.
