To be fair, Kaiserreich is specifically-designed to be more of an open-world sandbox than vanilla, thus every part of the world has its own little conflicts flaring up and bringing life to them; at some point, the mod needs anyone to be able to start attacking people, versus vanilla trying to mirror the real-life problems that would happen in a democratic state if they just arbitrarily-declared war on random nations.
Ideally, a fix for ideology would rather than adding new ideologies, would split alignment and ideology off of each other entirely, so in theory a democratic state like Finland could be fascist-aligned if they were pro-Germany, while an authoritarian state like Peru could shift to democratic-aligned if the US pushed its pan-American efforts. That would require a lot of work to balance out, but would solve some of the issues of faction-joining being completely haywire at times, as well as the fact that "nonaligned" is kind of a mess for a game that has increasingly blurred the distinction between alignment and ideology.