The immediate military effect is the disappearance of the Italian-driven campaigns in North Africa and Greece. Italy might quietly favor the anti-German powers and fortify its Alpine frontiers, but Germany gains little from opening another difficult land front. The same mountains that make Italy defensible make a German intervention costly and strategically unrewarding. Hitler also lacks both the motive and the 1938 strength to restore Mussolini, allowing Italian neutrality to persist.
Notable Point · 7:52-11:43
No Italian entry, no Mediterranean land war
A recovering neutral Italy removes the triggers for the North African and Greek campaigns while its mountain frontiers make a German intervention unattractive.