Good proposal! While Christians in North South may accept such federalism despite their marginalization, it also means that Druze will be marginalized by Christian majority in Mount Lebanon. This is an issue.
I think having cazas small districts as local governments are better representation for Lebanese. Or some sort of combination of powers between Mou7afaza and kada2.
This way, the governor of Mount Lebanon may have some powers, so does shouf "druze" Kaem makam. Same for the North for instance, the governor may be Sunni, but he may not have total control over Christian kada2 Bshareh Zgharta koura and Batroun.
Same for the south for example. You may have a Shiite governor, but Jezzine and Saida will have some self governance.
To guide our discussion about federalism/decentralization, we should ask ourselves: which powers should go to local governments?
How about something similar to the Canadian federal system?
There would be a constitution that cannot be violated by the different states. That would mean that Tripoli or the South can't institute Sharia Law.
The states should have some powers of taxation, responsibility over local infrastructure like roads and bridges, building/funding schools, and electricity.
The federal government would be responsible for defence, foreign policy, trade, currency, and federal infrastructure such as cross-country freeways.