I think that gets at what I very inarticulately tried and failed to say in the OP. I don't think the solution even need be as drastic as nerfing Greek military production, which would make playing Greece less enjoyable for players, even if you do compensate for the nerf through faster military construction.
@Trans_Atlantic_Drawl pointed out something important that I missed, which is that there is no supply hub in central Greece, which bogs the Axis down. In my current game, I sent an attache to Britain to check the supply situation. The Germans are at 8% supply due to that missing hub. It's Nov 1941 and Greece has held out for a year because the Axis have no supply. The problem here isn't that the Greek AI is capable of surviving, but that the German AI is incapable of succeeding on historical setting.
The solution need only be as simple as
@Caeric suggests - put a port on Agrinio and connect it by rail. If not that, then Paradox can put a port of Larissa, to represent the port of Volos, and connect it by rail. Or place a supply hub in northern Attica on the existing railway. Fix the supply situation and the problem goes away.
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