In the old days, it was important that each character, each gimmick, sat somewhere on the heel/face spectrum. It was important for the fans (particularly little children) and it was important for bookers. If each battle is good vs evil then we know who to root for. If you have two good guys fighting each other, it muddies the water and the same goes for two villains. We need to know who is pure and who is wicked. But the heel/face spectrum is strange. How does a wrestler establish themselves as a heel or a face? What must they do to get fans to boo or cheer for them?
A lot of wrestlers set themselves somewhere on the spectrum in relation to other wrestlers. If there are wrestlers Heel A and Face B, where Heel A cheats, makes fun of the crowd, is cowardly and against Face B, then the crowd will boo them. Heel A gets heat. If Face B is good, honest, goes over clean and is likeable and against Heel A, then Face B gets cheers. (There are always exceptions to the rule. See The Rock during his initial Rocky Maivia run and Roman Reigns in his current drizzling shits run.)
If Wrestler C appears and allies himself with Heel A, then Wrester C becomes Heel C and the opposite happens if he allies himself with Face B. Or if he is in the middle, he is an inbetweener, a Tweener. If Wrestler C becomes Heel C and then betrays Heel A… things start to get complicated. Simply pushing away from another Heel does not necessarily move you towards being a Face. Look at Randy Orton when he went against the Authority and was curb-stomped by Seth Rollins. He was not really a good guy or a bad guy. He was something else. Same for Brock Lesnar when he rebelled against the Authority after losing the belt to Seth Rollins at WrestleMania 31. Things start to get confusing.
If we look at Stone Cold and The Rock in the buildup to WrestleMania X7 (the X-7-iest of WrestleManias) we see two monster faces who have split the crowd in two. Both were at the end of a very successful run and Rock was WWF Champion. Stone Cold needed to pull out all the stops for this match and when it was revealed that it would be a no DQ, you knew shit was going down. Vince comes out, Stone Cold gets handed a steel chair from him and hits Rock to win the championship. With that, the whole WWF fanbase had to make a choice: Does Stone Cold become a heel for allying himself with Mr. McMahon or does he stay face, Vince become a face and Rock become the heel?
It turns out that we hate a shitheel that cheats to win but we really hate a shitheel who cheats to win and sells out. Stone Cold cemented his heel status by being a total cunt over the next couple of weeks, but for a moment, no one really knew who was good and who was bad. It was actually really nice because for that moment, we hated and loved everyone based on their skills and their personality and their actions as opposed to “YOU WILL LIKE THIS GUY BECAUSE I SAID SO” that sometimes sickens fans.