The issues are the benefits you'll get from this strategy: when France finally surrenders, Britain is also about to fall completely with Syria in german hands, and the usual downsides from DoWing Tunesia and Algeria to get Spain are not existing.
This way Britain has to fight on 3 theaters: England, Libya and Casablanca, with Egypt pinced from 2 sides. Yugoslavia won't join the Allies, if London is in german hands and gladly join the Axis, freeing troops aginst Russia, and Greece isn't a threat any longer as well, cause the DE depends on the yugoslavian DE.
Probable benefits: France surrenders including Algeria, Tunesia and Syria, Yugoslavia joins the Axis, Spain joins the Axis without the costs of the DE, Greece isn't a threat anymore, and should the Allied player be so stupid to move the brit. capital to Alexandria to improve supply in its main remaining theatre, GB will also surrender after the fall.
Russia doesn't get the persian convoy, and even the northern convoy won't help, especially after the destruction or surrender of the RN.
Next issue is the french NM: it`s probably not even necessary to take Algier, the NM usually gets to 0 earlier, and Algier can't be supported by the already overstretched Brits. The fighting value of the french is even worse than the italian, with their NM totally crippled, so essentially the Brits are on their own for a long period.
My suggestion would be to stiffen France' resistance in case the "Take all of France" decision. The downsides of Seelöwe are strictly enough imho.