There's a few reasons which were mentioned a while back in this thread. Basically:
I didn't see it, sorry.
1) It represents the divisions in Carlist ranks - they were fighting for their own fuero rights (i.e. Basque for Basque rights, Catalan for Catalan, etc.), amongst other things, but this was perhaps the most major factor.
No. The Carlists fought by Carlos, all other things were Carlos promises. The division beetween Carlists ranks wasn't because the fueros (Where do you read it? :wacko

. It was because the leaders: Only in Catalonia Carlists leaders were disconnected beetwen them, mostly because each own ambition.
2) It creates some real incentive to having a Carlist victory (i.e. more accepted cultures).
Now, it's imposible to have a Carlist victory. And the very first incentive to have a Carlist victory was... To put Carlos in the throne. Now, this hardly could happen.
And a Carlist victory would never lead to "more accepted cultures" (More? All the cultures in Spain were accepted in that time! :wacko

, only to a most decentralized structure of the state.
3) The alternative chains can be better represented with a separate Navarre, and recycling the U01 tag means we can afford this.
I can't imagine how, because now it's nearly impossible to reach Madrid. And for the regional event chains, I always see IA events that reannex the country to Spain. And honestly, I never had a problem with the old chain's of Carlist Spain becoming Catalonia or Navarra.
As for removing cultures from Spain, well this is to highlight the dominance of Spanish culture during the period, as well as the various nationalist aspirations of the other cultures during the period (e.g. the Renaixença in Catalonia, beginning in the 1830s and 1840s, as well as how Basque nationalism is closely entwined - at least in the beginning - with Carlism). It also partly helps balance Spain back out, though Spain still is a bit too strong.
What? :wacko:
Sorry, but that a bizarre nonsense.
First, there's no "Spanish culture dominance" during the period. In fact, many people in Spain argued why Spain had Catalan and Basque cultures in Victoria and UK hasn't Scottish and Welsh cultures. Or why there's no Wallonian culture, etc...
The differences between an Aragonese and a Catalan were nearly nothing, for example. And both of them were treated exactly the same by the State. A different case were the fueros of Navarra and the Basque country, wich remained untouched until 1877.
And, obviously, Spain never repressed Basque and Catalan cultures until 1939.
Second, you converted a succession war into a nationalist war. But it's a fake. In the First Carlist War there's nothing nationalistic. Both Basque and Catalan political nationalism start in the second half of XIX Century (The Renaixença isn't a nationalist aspiration only a cultural Golden Age). Remember that fighting for mantaining your special status in the economic structure of the State isn't nationalism, simply decentralism.
Third, erasing Catalan and Basque cultures is a nonsense because they were both accepted (In Victoria terms) by the State. If you think Spain is too strong (Strange, I think is a bit too weak) search other changes, but what you have done here is like create a Scottish culture and erase it from UK, or create an Occitan culture in France and erase it (And this is more logical, because France didn't recognize Occitan, Breton or Corsican cultures).
P.S: When I said in the Spanish Forum that the VIP 0.4 erased both cultures from accepted ones and splited the Carlists beetwen two nations wich nationalism didn't exist until decades after, everybody go :wacko:. Even the nationalists. I think it's a clearly proof that you failed when you erased both Catalan and Basque cultures from the accepted ones in Spain (Wich were all of the cultures in the country aside colonies) and by spliting arbitrarily the Carlist movement.