Never really understood that argument in a WIE sense. Yes, it kinda makes sense in the context of WITE and WITW because there, you are a partisan theater commander. To a partisan theater commander, their front is all that matters and to hell with the other one(s). So long as they don't collapse completely, they only need just enough to maintain them as they are.
But for WIE? the logic doesnt make nearly as much sense. For one thing, the fronts are a minimum of 2 weeks journey apart for most of the time and there is only a limited rail capacity available to the player, meaning that if you transfer troops between them regularly, your forces spend much of their time in transit rather than in action and you will lose, at least to some extent, the flexibility to transfer forces within a given theater. Add to that things like air interdiction and damage to railways and centers and you lose both forces and additional time that could have been better spent keeping those units on their respective fronts. Thus, although you can potentially use the transfer of forces to decisive effect, the reality is that you are probably not going to be able to use this advantage with any kind of regularity, making it something that you could maybe use a handful of times in the campaign to good effect, but most of the time, you are probably going to be in a position where you can only afford to undertake transfer like this on a relatively rare basis
On top of that, you are no longer a partisan theater commander. You are no longer in a position where you can mostly ignore the other front. If things are looking bad on the other front, the mess will be yours to clean up, forcing you to be a good deal more conservative about when, how and how much you transfer forces between fronts. On top of that, if you are playing against a player opponent who is in control of both fronts, I'm sure they would be very capable of taking advantage of any significant transfer of forces between the two fronts and if they don't, that isnt a balance issue.
Ultimately, the Axis player would be at more of a disadvantage than in WITE or WITW, since they would either only be able to transfer so few forces that it wouldn't make a decisive difference, or they would transfer too many forces and leave themselves vulnerable on one front or another while, if anything, the Allied player would have a major advantage, being able to wield the might of the combined allied war effort in a coordinated and conscious fashion rather than having to rely on the dice roll outcomes generated by the theater box. The Allied player would also, incidentally, benefit from no longer being a partisan theater commander, since now they would simply be able to view the overall situation relatively objectively, being able to play as if the only goal is defeating the Axis forces rather than trying to win solely for the western or Soviet allies (e.g. it wouldnt matter if the Soviets or western allies got to Berlin/Germany first, only that someone got there. The weight of achieving victory is more evenly distributed and you no longer have to play as if, if your theater doesn't win the war then you lose the game).
You also make it seem like the ability of transferring forces between fronts would be solely a thing that empowers the Axis, allowing them to take the initiative in the war (e.g. your example of the Axis bringing in more forces to launch a spoiling offensive in the east then transferring back west in '43). The reality is, though, that the transfer of forces is just as likely to be something that the Allied player can use to take the initiative. For instance, as in the actual history, you can create crisis's for the axis player (e.g. the disasters of Stalingrad or Bagration in the east, or the invasion of Italy and the collapse of the Normandy Front in the west) and force the Axis player to transfer forces from one front to another, rather than the decision being one that is entirely within the Axis player's control. Thus rather than the Axis being the one using the transfer system to their advantage, the Axis player is now sort of a slave to this system, needing to transfer forces to respond to catastrophes that were pretty much the norm for the Germans by this stage of the war and ensuring that these troop transfers are more like a band aid the axis player can apply rather than something that gives them a real advantage.