Incorrect. A German player could do something about it. They are not restricted by WT from taking diplomatic actions. They could have sent volunteers or equipment to Austria or Czechoslovakia. Or, more usefully, they could have guaranteed either Czechoslovakia ("hands off, we want Sudetenland") or Yugoslavia. Especially by that time it becomes obvious Hungary is out of control.
They could do that, true. But it would be a gamble with WT. Because WT does depend on who is involved in a war. If they guarantee Hungary's neighbors and it still declares war, WT would rise much stronger. So Germany would have to hope to intimidate Hungary enough, which kind of is the mechanic of a guarantee, so okay. This is indeed something Germany could do in theory. But I don't know whether they can (relations to their neighbors) and whether it would hamper their later expansion. It also seems strange that the fascists nations would become peacekeepers due to this mechanic... It might not be feasible to spam those.
Not only does the guarantee by Germany reduce WT, it presents Daniel with a real dilemma in the case of Yugoslavia that he would have a two-front war.
I did not notice yet that guarantees reduce WT, but I will try to confirm that when I get the chance. But we know that graceful peaces do reduce WT, so it might reduce the war impact alittle bit.
Countries who have a guarantee are not aggressors, even if Daniel had ignored the guarantee and Germany ends up in a war. Germany hasn't fabricated a claim against Hungary and DoW'ed. Germany hasn't increased WT. And there can be no repercussions from this from the Allies. Unless... Germany defeats Hungary and annexes it. They might be OK to annex the Sudetenland (if there are cores), but not the whole country.
There still is a war much bigger than it would have been without Germany, which increases WT.
Germany can puppet Hungary, or even release it as a fascist country. It was a fascist country before under Daniel, but once he surrenders I believe he can't come back, even if there is no ideology change. An AI controlled fascist Hungary should be much more amenable to diplomatic action by Germany, including joining the Axis. Or if you are reluctant to take that risk, then puppet Hungary. That gives Germany control over much of Central Europe without causing problems with the Allies. It might even lead them to befriend Germany, if both are fighting Hungary, and enter into a war against the Soviet Union.
Puppeting does increase WT. And in that case, it was even you who raised it, so there is no reason to believe that Allies will like you for it.
However, the only way to really stop aggression in HoI4 is to go to war against the aggressor, assuming that guarantees can not be spread out as seen fit.
But, even if I assume that you might be able to keep WT somewhat lower by doing what you described as Germany, it still seems a very odd way to play the pre-war time. Well, since this is an MP-scenario, we maybe should not expect any better.
