There's several reasons he's wrong.
They start with the Sons of Confederate Veterans being a recognized nonprofit agency. Related to that, lest we have the irony of Greg Abbott talking about hate speech is that, officially, they are about promoting historic heritage, namely that of Texas soldiers who fought for the South in the Civil War. I think it's a bunch of bloviating Texas exceptionalism, but that's another issue.
Second, there's clear semi-precedent that says Abbott is wrong. It's only semi-precedent because it's not the exact same legal issue, but it's close enough.
Namely, it's the tussle that a number of states had, several years ago, over Adopt-a-Highway sponsorship, and more specifically signs announcing something like, "The next 2 miles are sponsored for clean-up by the Grand Klaven of the Knights of the Klan."
Groups like that were wanting to sponsor highway spots. So were gay rights groups, and with civil unions having less support a decade ago than gay marriage does now, that too became problematic.
But, in various states, state and federal courts alike said that it was a First Amendment issue. States had to list all Adopt-a-Highway sponsors. Or else none. Being selective is censorship. In its proper, First Amendment definition.
What about the flag, the flag as a symbol? Could the state print SCV vanity plates without the tag? Don't think so. First, ever since Texas v Johnson, flags certainly have a place in protected speech. Abbott's only angle here would be for the state to drop logos and symbols from all personalized plates, and nobody's going to buy those.
Abbott could try applying the Dr Pepper plate rule, but I'm sure the SCV could get 200 pre-orders, and the logo, as it now stands, doesn't unduly clutter the plate.
I have no doubt that people beyond SCV supporters will order the plates. However, outside of criminal law, legal statues in general aren't allowed to take intent into account.
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