I do agree there's a mismatch in how C&C is being represented ingame, but I don't think that is happening in the form of overload, but in how cooperation penalties are being applied. I don't see why the Soviets should have only penalties for Army level cooperation while the Germans already suffer for Corps level cooperation. Make cooperation penalties kick in at Army level for both.
Somehow I am bothered to ask one more time (just for the sake of my curiosity) -
Am I right or wrong? And if wrong, then where is flaw in my logic?
What was the question again? Oh...right. An alleged Command and Control disadvantage for the Axis. You're wrong.
The flaw in your logic is that with the Axis, you have 4 layers of C&C, which are only slightly overloaded, given a maximizing of forces assigned to lower tiers of command. Meanwhile, the Soviets are stuck with only 3 layers of C&C, with all of the layers subject to overloading, given anything close to a historical OOB. So, in short, the Axis are getting 4 chances at making thousands of hidden die rolls, which are generally not suffering too hard a drm, while the Soviets are getting 3 chances at making those die rolls and generally suffering a more drastic drm.
That said, it is possible for both the Axis and the Soviets to lessen the impact of overloading, by spending APs, and rotating troops. The Axis can, and should have the bulk of the regiments and several of the divisions used in garrison duty or partisan hunting. For example, the Static Divisions and Luftwaffe Regiments are ideally suited for breaking down and covering the Leningrad area. All rear area forces, and rebuilding, or refitting units can be assigned to OKH, relieving stress at the lower levels. Also, some of the forces could be assigned to Finnish HQs, which are led by relatively good commanders. Granted the Finnish Army is short on Corps HQs, so the forces will likely be assigned at the Army level, unless you assign a German Korps to one of the Finnish HQs.
The Soviets have the potential to work around their C&C limitations to some degree by buying more Army HQs, but they run into a severe shortage of APs to buy them, good generals to lead them, and higher level HQs to assign them to. At the current stage of development, STAVKA is severely overloaded, making it virtually useless. The Fronts, will be overloaded if you assign all of your forces to them, as well, leaving only a single layer of inept Army command to make the thousands of hidden die rolls. So, even though the Soviets can play around with the tools given in order to optimize their C&C, these optimizations are still far behind what the Axis can manage.
I see the point for the Command constraints on the Soviets, their C&C in the beginning was very bad, AP's are a big bottle neck for them since they need AP's for anything and everything, this makes the trade offs in how they are spent important.
However, I don't see the point of such artificial constraints for the Germans. What is it supposed to represent? Their C&C was fine from the beginning, AP's are not their bottleneck since they don't have the wide range of choice on how to spend them and the management methods you note are tedious player admin duties which don't add anything to the game.
Allow the Germans to buy additional Corps and Army HQ's for a few 100 AP's, there would then at least be some point to having them.
As far as high ROF elements skewing combat results, that is something that I simply don't worry about, since there is virtually nothing in my control as a player that I can affect, nor even as a beta tester, to encourage development of. Combat system changes are high-risk programming choices that the developers are not likely to take on, given a lack of a clear vision as to what is wrong, if anything, and the specific steps needed to address them that won't ripple through the rest of the engine and likely break something else.
While I agree that the combat engine per se isn't going to change, there's no reason not to tinker with the data.