Yes, Don't Mess With Texas is an anti-littering campaign. I hope Elon wasn't littering.
For reference, the Confederate Air Force (now Commemorative Air Force) is the "Official Air Force of Texas". Perhaps Elon just need to sell a Dixie Flag commemorative model to get to be Official Car Maker of Texas and he can get in.
Also, the use of the term 'Confederate' in the CAF originally had nothing at all to do with the U.S. Civil War, and later became a kind of running joke the members ran with.
I only spent about 30 years in Texas, so maybe I didn't absorb the culture as much as you. I can assure you I know many people that attended a Robert E. Lee High School in San Antonio (established 1958) and have seen plenty of Dixie flags. Not as common as the Texas flag, sure, but still not that uncommon, especially in rural parts. Another Old South reference in High School was Tascosa, http://thsamaisd.sharpschool.com/news/school_history. I'm certain there are plenty more, it's a big state, those are just two off the top of my head I have personal knowledge of.
They should never have voted something with Confederate in the name as anything state 'Official', but there are still plenty of people there that don't get it.
I've lived here about 25 years combined and spent 5 years in other states (including South Carolina and New York), some city, some rural, and my experience is that the rebel flag is not that common as compared to other places (I even saw several in rural areas of upstate New York). Different experiences, I suppose.