Awwwww, there's always one in the crowd that throws the monkey wrench into the gears.
There's nothing wrong with a scout wearing a historical uniform, but if they do they need to have the proper rank on it. For example, a Second Class (earned rank) scout cannot put a First Class rank patch on any uniform, modern or historical. I would go with some other sort of designation to indicate the "heart" of the scout.
I used a lanyard system when I was working as an ASM in charge of Scout Spirit/Leadership Development. I went to the craft shop and bought 5 different colors of plastic lanyard and cut them into 8" strips. Whenever I saw the boys doing something along the lines of recognizable SS or Leadership, I would loop the piece of lanyard through the button hole on the temporary patch pocket. The colors were ranked:
For all the hard-nosed SM's out there they will be happy to note that these colors could go both up AND DOWN. A boy at Gold could find himself loosing the lanyard and have to start all over again if the infraction was bad enough. However, I made sure the colors went up as often as possible. I held out a bit on the Gold, but some of my hot-shot TF's would skyrocket to the Gold and stay there for some time. They turned out over time to be the better scouts.
The incentive was to show show Scout Spirit and Leadership especially when it was "not expected of them!" It was also a way of expressing disappointment in a scout that screwed up big time without having to do a haranguing lecture where the adult spends too much time telling the boy he screwed up and he knows it already.
The perks of the lanyards? "10:00 pm, boys, head to bed. Blue or higher can stay at the campfire for an extra half hour if they wish." or SM offers to help the Silver Scout clean Dutch ovens and does a friendly chat of encouragement/appreciation with him to make the job easier.
I found it a quick way to change the culture and focus of the unit.
No rules, nothing written down, just a way of letting the boys know they are doing (or not doing) a good job of Scouting. The only one besides the SM/ASM that could change the colors were the PL's.
As far as being fair? PL docks the boy because he was goofing off Friday night not helping set up camp with the new boys. He complains to the SM, SM then asks him what he's going to do to get the color back before the end of the weekend. In most cases, they always did. No blaming, no punishments, just opportunities to learn to put Scout Spirit and Leadership into practice.