i've also seen huge non-german axis gains swept away by the bitter peace, playing as italy.
if italy or germany attacks through the caucuses and persia, central asia will crumble quickly and you can flank the SU at Stalingrad. When you do this, these axis lands gained are often lost by the bitter peace.
As far as a remedy, try releasing uzbekistan, tajikiatsan, kyrgzstan and perhaps armenia incrementally. Transural Republic and Siberia too maybe, but these giants will block your occupation eastward so don't do both....
Bitter peace seems most likely to fire if you have moscow, leningrad and stalingrad occupied plus big central industrial centers like Omsk, Sverdosk.
Letting Italy grab central asia is a good idea because you want to preserve finite german manpower and because it is better for italy to release puppets therein because germany doing so will lead to a TC overload from dissent on the main front line at the turning point of the war.
Besides, Germany aims to rule up to the urals for role playing purposes.
The weirdest bit about the bitter peace is that axis usually get to keep mongolia and tanna tuva so you may find units out of supply there....if too many, you may have no option but to release as puppet just so they don't starve to death!
