AFAIK the locomotives were fairly successful, but relied on Bulleid's chain-driven valve gear to realise the full benefits of light weight and high efficiency. In practice, the valve gear didn't perform as expected, meaning that they were less reliable and less efficient than if conventional valve gear had been fitted.
The rebuilds did exactly that, replacing the Bulleid valve gear with Walschaerts valve gear. This worked better, but added several tonnes to the weight of the locomotives, meaning they couldn't run on all the routes they'd been intended for.
Someone more familiar with the Southern Railway can probably correct all the bits I've got wrong!
The two main issues with the Pacifics in their original form was that the oil bath leaked, and the "air smoothed" casing was found to have dead pockets of air, which filled with smoke and obstructed view of the road ahead. The oil bath needed inspection, as this involved removing covers, this work was not always carried out, which meant faults could go undetected, or worse, leaving the cover off, so the oil became contaminated by dirt and grit.
Bulleid originally wanted a eight coupled engine, but foundered on the rock of the civil engineer, Ellson, so was forced to admit defeat and settle for a Pacific.
When introduced, the locomotives became a symbol of modernisation, but began to fall from grace following the results of the 1948 locomotive exchanges, being heavily penalised for coal and water consumption. More problems when one of the Merchant Navy class was tested at Rugby. Results were inconsistent, sometimes theoretically impossible. Oil from the bath leaked onto the rollers, necessitating frequent cleaning. The steam reverser was inclined to creep, not enough to affect daily use, but hindered accurate testing. It was clamped in position, but the locomotive had to be stationary before adjustment was made. So the conclusion was reached that the locomotives were unreliable, hence the rebuilding process.
Leader was doomed from the start. The tide had turned against the steam engine, and Bulleid's dream of a modern steam locomotive was not to be. By the time work was underway, he had resigned from British Railways, and without him, the outcome was inevitable. The prototype Leader made several test runs, about half ending in failure. The locomotive had the virtues - and vices - of the Pacifics, only more so. One problem was the fireman having to work in an enclosed space, not to be able to see where the train was, which meant his position was unsafe. The second member of the class was almost complete, when the order came to abandon the project, with the third locomotive, little more than a frame on wheels, all three were scrapped
