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I don't think this is a supported or valid configuration.
You're using a resource Type of "string" but the default you're providing is not a "string".
Region isn't a valid AWS special parameter type to be used in Resource: http://docs.aws.amazon.com/AWSCloudFormation/latest/UserGuide/parameters-section-structure.html#aws-specific-parameter-types
To move forward you will probably need to pick a default value from your AllowedValues (like "us-east-1"). Slightly less convenient than having the current region populated.
As an aside - CloudFormation doesn't operate cross region. So if you're intending to use this region parameter later during resource creation it probably won't work!
The following did work for me for the region:
However, the same did not work for ${AWS::AccountId}.