Alternatively, am I approaching this from the wrong direction, and
need to have the Empire represent legitimate antagonistic force?

You've got plenty of answers here so I'll offer a different approach.

The "real" tension in the story, and where most of the conflict will arise, is between the rebel leaders themselves.

Develop the Anti-Team first

I think you should focus on subverting the Team Trope before you make a decision about the Evil Empire trope.

What is an Anti-Team? Rather than heroes learning to work together and synergizing through their strengths to defeat the big bad, you have competitive egos trying to occupy the same leadership roles, not listening to each other, and making selfish mistakes. How does that get resolved? Does it resolve?

I've looked for "anti-team" stories (for my own use) and haven't found many satisfying examples.

Mystery Men starts off anti-team. They are all jealous and hyper-critical of each other's hero personas. They become the rag-tag team of misfits by the end. By overcoming their anti-team tendencies they become true heroes.
Guardians of the Galaxy is a team of anti-heroes – each individual has anti-social traits but there's no question they are a team, just dysfunctional.
Farscape combines anti-heroes with anti-team – the show suffers from lack of focus (bordering on experimental theater). Everyone is equally unlikeable. There is no heart. "Heart" is an archetype on the team – usually the girl – who de-fuses interpersonal conflicts and holds the team together with niceness. I'm not sure if this is a flaw with anti-team or a flaw of Farscape.
The Last Jedi shows traditional heroes fail because they are anti-team. They leave on personal wild goose chases, they mutiny against their superiors, they misjudge their enemies (and friends), they are over-confident, and when facing loss they make empty gestures of self-sacrifice.

Some other examples come close but don't quite fit. Watchmen is a broken team (arguably not even a team, more like damaged alumni). Star Trek's mirror universe would presumably function as anti-team but it exists for narrative counterpoint. Mirror universe doesn't make sense but neither do the Sith.

Which brings us to...

Rebel against what?

With a fractious and uncertain Anti-Team carrying most of the drama and interest, ditch the cartoon villains. Assuming you have shades of grey and moral ambiguities within the good guys, you don't need a vantablack counterpoint because your team isn't milk white – you can still use the antagonist to counterpoint something – there has to be a pretext for the anti-team to come together. But if their enemy is satanic skullspiders wearing swastika helmets and their plan is to murder the universe, the anti-team are always going to have congruent strategies. Moreover, why are they the only ones rebelling if everyone routinely gets steamrolled?

Empires are not just marching boots they are also economies and cultures. This is the issue I have with Star Wars. A "flat" antagonist isn't doing you any narrative favors, there's nothing to divide your team. That's why I say work out the dynamics of the anti-team first. Figure out what you want to say with that dynamic because the antagonist will be the thing that makes it worse, and succeeds in counterpoint.

Trope Talk does a good breakdown of problems with Evil Empires, as related to goals of the protagonist (ie: replace the Emperor).

Consider real life rebellions.

If the rebellion is religious, like an English King abolishes the Catholic church and then dies leaving his daughters to sort it out, your rebels might have history with Rome, or prefer a weak local church that can be bribed. They don't all need to be devout crusaders against a cartoon monotrope, some interests overlap but some don't. The US South rebelled so they could keep their colonial economy and lifestyle, but the clock was ticking as they'd lost power in Congress. Meanwhile there were Confederate states that didn't export cotton, and some Union states had race riots. The conflict can still be about a broad thing, but leave room for fractures to occur where some rebels aren't invested in every aspect of the cause.

the Anti-Evil Empire

To break the trope of the Evil Empire, I suggest:

There is no Evil Empire Don Quixote is a bizarre comedy about a man who is rebelling against the loss of chivalry (or something). He misidentifies his targets, mistakes locals for his enemies, and is a general crazy nuisance. He attacks windmills believing they are monsters. Terry Guiliam's Brazil can be interpreted similarly where the "attacks" are provoked by bucking the system.
The Empire isn't Evil and is actually very disappointed that you would feel that way considering everything it's done to ensure universal happiness. (Brave New World, Fahrenheit 451)
The Empire didn't know it was evil but now that you have uncovered this dark secret you will be eliminated.
The Empire is Evil but (fill in the blank)

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