It might work, but I consider the north - south system to be unbalanced, as there are more clubs in southern Scotland. Teams like Cowdenbeath or East Fife wouldn't be happy to be in the northern conference. For a regionalized third tier I prefer 3 conferences
This year it could have been like this :18 teams divided into three conferences (adding Partick and Falkirk to the Championship).
Each conference with 6 teams.
NORTH
Elgin, Peterhead, Cove, Montrose, Brechin, Forfar
SOUTH-EAST
East Fife, Clyde, Stirling, Stenhousemuir, Cowdenbeath, Edinburgh City
SOUTH-WEST
Annan, Stranraer, Queen's Park, Dumbarton, Albion, Airdrie
It could work using a hybrid system between full national championship and full regionalization:
Each team plays x4 against their Conference teams and once (either home or away) against the teams from the other conferences.