Most interesting observation, a strategy I certainly never thought of.
This is subtle. It really is not obvious to me that it is a big win for the Axis. I'm not entirely opposed to allowing it to occur, I was after more variability in the starting game.
1. Axis attacks 2 neutrals early
WR increases by 2-4 points, guaranteeing the USSR the ability to attain FM=2 at least one turn early. (this is why I never attack Denmark before Vichy, and one reason I would be unlikely to have thought of this strategy, and why I never found it during testing).
2. Italy joins early
(This could happen anyway, by random event. So if this is unbalancing, please help me fix it.) South France unfreezes, the French fleet can delay the Italians in the Med for a turn or two (until surrender). If S France is captured, then France surrenders but Vichy is not formed, i.e. French North Africa will remain WA controlled.
Some ideas to play with to possibly improve things:
A. decrease Yugoslavia's political volatility. It is now 7 in GG (it is 6 in TW). I increased it from 6 to 7 at some point in my Balkans adjustments, but forgot to put it back when I was done (it is no longer necessary to achieve the goals I had, given the current political events). This could be reduced back to 6, or even 5, to make the strategy less certain.
B. Increase the French forces in Southern France. This will make the unfreezing a little less difficult to the WA (although already it actually seems more difficult to the Germans than the other way around).
C. Change the Vichy surrender rules, so France surrenders but N Africa does not become Vichy if France was unfrozen (right now Vichy is not formed if S France is captured, this idea is extending that to be whenever Italy is in the war prior to French surrender).
A drawback in idea (A) is that the German player can play and replay the first turn until he gets what he wants. Ideally the game would start with the WA player, who would do nothing except set his password, then send the game to the German player. This would prevent the first turn cheats.
Any other ideas (that preserve variability of the first turns while also preserving balance)?