The British for example can intervene (requires fascist or communist sentiment) in Scandinavia or Benelux before the Germans start their invasion. This system is pretty strict, but it also offers a more realistic approach than allowing war for everybody against everybody. For example a british invasion of France without major ideological shift is just not realistic in the 1930's.
I agree, it is more realistic. It would basically mean "All hail Mosley! Let's support Hitler's Germany". The advantage of more open system is that it doesn't have spell out to the player that there is such possibility, it can just lurk somewhere in the shadows and kick in when stats are right and player himself is willing. Major political shit would be of course the goal here for which we would have to ideally fight.