I know everybody says that Hungary kept its army at Romanian border because it was really more afraid of Romanians than the Soviets. However, now I just think that it was just an excuse not to send their troops to Russia where they had nothing to gain and lose a lot. So they just said to Hitler, sorry those nasty Romanians can back-stab us any time. I do not think they really saw any Romanian threat when Germans were bosses.
...except that they DID send an army to fight Russia, including both of their armored battalions. There was a real fear of attack by Romania, because it had already happened once, less than 20 years earlier (AFTER, not during, WWI). There was also a real fear of attack by Hungary on the part of Romania, because Hungary was applying as much pressure as possible for the return of the land and people turned over to Romania at the end of WWI, and the incursions into both Czechoslovakia and Yugoslavia during the early stages of the war proved that they were quite willing to use force to get it back.
The small "cores" in the game are merely the token areas that were actually reoccupied during the war (in Yugoslavia), or turned over as a result of Hungary pressing Hitler for their return (in Czechoslovakia and Romania). The previous borders of HU for most of the 900+ years before WWI included the entire "brain-shaped" ring of the Carpathian Mountain range, visible on the map in Terrain mode.
In the end, Germany occupied Hungary to insure loyalty after Hungary made overtures to the Allies about dropping out of the war, and sent a larger proportion of the border defenders to assist in the fight in Russia. Not all that long after, Romania surrendered to the Soviets, who promptly send the Romanian army on the offensive into Hungary. That "just an excuse" suddenly materialized into an attack, so it wasn't only an excuse, it turned out to be quite valid. While the previously sizable portions of the Hugarian army were fully capable of holding the border against the Romanians, the addition of large Soviet armored forces made it impossible for the heavily depleted remnants of that army to hold the open plains in the South, and the combined Soviet/Romanian armies poured into the Carpathian Basin. The animosity was enough to keep the Hungarian army fighting against the Russians until a few days AFTER the battered remnants of the Hungarian army had been driven completely out of the country into Austria, and there was no homeland left to defend.
Funny, how the starting relations in the game between HU and RO are 75, which is the same as between the US and Canada.