When I first watched The Wall as a teenager it blew my mind, of course, but I found the notion of this rock star turning into a full blown Nazi kind of silly. That part just felt out of place to me.
Today I find it horrifyingly accurate, and all too prescient.
Don't the lyrics in "In the Flesh" indicate that the nazis are actually a different band that had to be called in as substitutes because the lead singer of the band that was supposed to play is currently going through a mental breakdown in his hotel room (i.e. stuck behind the wall)? The main figure of the album might've just imagined the whole thing, though.
The "surrogate band" line is just Pink playing off his surreal transformation. It's the same actor playing very much the same character. Absolutely none of the story actually makes sense otherwise. Whether the performance happens in reality or in his head is an exercise for the reader though.