The Rabbit figure from Sexy Beast represents Don Logan's own sexual frustration and how it looms over everyone else's lives. This assumption is based off Don's character, particularly how he reacts to his cohorts' intimacy and sexual activity throughout the movie that's shown, implied and symbolized as well as through the character's own testimony.
Don Logan is an individual who is sexually repressed to the point intimacy infuriates him. We first see Don Logan alone in his underwear, listening to his superior describe an incident where their boss was sodomized. Don Logan rather than being disgusted asks questions till he knows every detail of Bass's motivation as well as the plans for the heist.
This scene revealed Don as desperate for human-contact, even perhaps physical affection. This is reaffirmed when Don takes each of Gal's rejections to participate in the heist extremely personally . . . to the point he physically harms Gal, almost like a jealous lover. This clearly represents the actions of a psychopath, and there are a lot of scenes that show that aspect of Don Logan.
We're shown Don Logan is incapable of connecting to others when he chooses to talk to himself rather than other people, just right before he attacks Gal. We're shown Don Logan has the ability to mimic what's considered 'normal' behavior - like a real psychopath - when he repeats the conversations he's had with his superiors . . . almost verbatim. We're even shown his lack of empathy for Gal, Aitch and Gal's pool boy when he severely injures all three. Now the thing to keep in mind is, yes Don Logan is an irredeemable psychopath - but there's something at the heart of Don Logan's neurosis driving him - so keep that in mind.
Now if we're to examine Gal's 1st dream sequence, it's actually showing the
'potential' for harm Gal will encounter due to Don Logan's far-reaching sexual hostility
- no matter what Gal chooses to do. In essence, because Don Logan's repression is what makes him so dangerous Gal can't do anything; have you ever tried talking to someone who's going through a dry spell - it is the pinnacle of awkward and the way the cast acts around Don Logan is overtly-cautious and sheepishly, taking great effort not to offend. And like us, the audience, Gal is forced to sit across from the automatic pistol carrying Rabbit, remaining dumbfound at his table - a kind of elephant in the room if you will. The Rabbit doesn't fire . . . just points the gun threateningly at Gal. We see this kind of heightened sexual resentment in Don all throughout the movie.
Don Logan does what he can to get to Gal due to this resentment: he reminds Gal DeDe was a hardcore pornstar who had sex with hundreds, threatens to tell Aitch that he slept with Jackie - which may not even be true due to Don Logan's propensity to lie - Don even claims he loves Jackie 3 years after assumedly one night with her, which Jackie neither confirms or denies. These all serve as justification for Don Logan not just to be alone but also undesirable to the opposite sex and even the same sex. Even Bass (a bisexual) doesn't seem to be phased by his loyal henchman's disappearance as he claims "if I gave a solitary fuck about Don . . . " which serves two purposes: (1) implying a more than personal history where even he couldn't stand Don Logan, seeing him as a means to an end, and (2) dehumanizing Don Logan to the point he's less than man which is shown time and again, best evident by the same actor portraying the anthropomorphic rabbit. But this is not the best evidence to support this argument; the BEST evidence to drive this point home comes in the form of the visual symbolism of Sexy Beast.
In fact, in the 1st act a giant boulder has destroyed the Dove's pool, it's drained to be fixed at the same time Don Logan visits. It comes as no surprise during the interim of Don Logan's stay the chemistry between the Dove's suffers, but it's more what's implied about the situation that ends up revealing more about Don Logan's character.
The significance of the pool is important because not only has the director included numerous scenes of characters interacting with it, but FREQUENTLY in cinema water is used psychologically as a visual metaphor for sex - and in this movie it's used heavily . . . except in scenes with Don Logan. Now isn't it odd that the audience sees Gal and DeeDee in their pool, watches Bass bare-back in an orgy, witnesses a group of gangsters raiding a bathhouse/enjoying each other's company . . . but not one scene where Don Logan is located near water? In fact, the pool is empty the whole time Don Logan is present except at the end of the movie when Don is buried under the pool - now filled with water.
Now many may claim the Rabbit represents death but actually it's only in the 1st and 3rd appearance of the Rabbit where its meaning is important. The 1st time it appears, of course it means Don is coming. The 2nd time it's just a red herring b/c Don is already dead and nothing happens to Gal - in fact Gal faces no consequences for his actions; he
gets away with it! The 3rd and last time shows Don Logan buried under Gal's pool with the Rabbit kicking in his coffin as Don tells him: "Fuck-Off!". In short and lastly, what else could the Rabbit be but Don Logan's own sexual frustration when he's too late to do anything to appease it? And just to prove the point - Don Logan is buried under a pair of hearts - Love conquers all people, love conquers all!