For Ubuntu MATE's software, yes, please continue with "Hebrew (Israel)" as these are the only locales available:
he_IL: "Hebrew (Israel)"
he: "Hebrew"
Hebrew Ubuntu MATE users would have set their language to he_IL during installation, so there isn't other Hebrew-speaking countries to take into consideration. It would be a risk to start swapping locales around at this stage, I'd like to avoid it.
For MATE Desktop, I don't have control over their translations, but they do have one for Hebrew.. You should be able to join their team and begin translating. A country-specific one isn't necessary and would duplicate efforts.
Each project will handle translations differently. MATE Desktop appear to use more "generic" languages, whereas Ubuntu MATE favours country-specific where differences in language occur, like English (US) and English (GB).
Welcome is programmed to use the country locale first (he-IL), otherwise it will try a generic language locale (he).
This topic was originally about cleaning up Welcome's uncontrolled language requests early on. An example was a fully completed de translation that ended up going unused for most German users (in Germany) as there was a new and massively incomplete de_DE locale that overrode.
German is spoken in other countries, which is why the decision was made to switch to the generic language locale to catch all of them:
de_AT: "German (Austria)",
de_BE: "German (Belgium)",
de_DE: "German (Germany)",
de_LI: "German (Liechtenstein)",
de_LU: "German (Luxembourg)",
de_CH: "German (Switzerland)",
de: "German",
No action seems necessary for Hebrew. It would be safer to continue translating "Hebrew (Israel)" for Ubuntu MATE and "Hebrew" for MATE Desktop as there isn't other countries that will miss out. Swapping locales is not a feature of Transifex so it would pose a risk to the existing translation efforts.
No worries about asking questions. Thanks for making Ubuntu MATE accessible for Hebrew speakers. 