You make a fair point about Hungary - however, Daniel/Hungary have actually deployed/prepared/concentrated for war, with what little he has, while no one else has. He has won his two offensives precisely (and possibly only) because he has massed literally everything he has and stormed it in to unsuspecting countries at peace before they can even mobilise, let alone organise.
While I am sure that Hitler is screaming at the walls about Hungarian upstart peasants, and it's certainly a major setback and blow to his dreams, the AI might just be reflecting that, realistically, intervening is too great a risk at this time. Germany could respond with military action, but to repeat, Hitler sees a bigger picture, he has far reaching ambitions, that go far beyond Austria, as precious as it is to him. Why risk it all on a war now, that at this point would be a hazardous gamble, that could destroy what strength he has and put him back years, when he can continue to build up and then hit Hungary later with great might and far better chances of success? It is entirely appropriate for Germany to NOT go to war against Hungary at this point. Although I would certainly expect them to at some point in the years to come, unless perhaps, Hungary joins the Axis.
Meanwhile the Allies/Entente might technically be in place, but France and Britain are still rather busy avoiding war at this point; (just as they did historically, time and again throughout the thirties despite increasingly blatant aggressive acts by Hitler). France has internal problems and poor unity, Britain has just it's handful of regular divisions, and both are still obsessively trying to avoid a repeat of the horrors of WWI. They aren't going to challenge Hungary with war unless they really cannot avoid it.
So, as far as I am concerned (and it is only my opinion after all), I think any military intervention by either Germany, France or the UK at this point would be... rather incredible. I think the Ai is being really quite realistic and plausible in not having all those countries suddenly rise up in arms.
For now.