Is it unrealistic for a barbarian state to hire other barbarians as mercenaries (I suppose the term foederati could still be used for this sort of thing). I'm thinking the Visigoths may have to hire other groups to defend themselves against Eastern Roman incursion.
Also could a western Roman army without any foederati within it ever defeat barbarians at this point in time?
A barbarian state at the time, realistically could hire other barbarians as mercenaries. Like the formation of Alaric's Visigoth army in OTL, these mercenaries, whether individuals or whole tribes of barbarians, may eventually integrate into the Visigothic kingdom.
As for your second question, yes, I think a western Roman army could defeat barbarian forces at this time, but they would have to have at least a core of veterans to support conscripted levies, and it would be best if their commander was skilled at leading men. As I'm sure you know, conscripting levies from Roman citizens became increasingly difficult after 400AD -mostly because of low wages, a lessening in civic pride, and a reluctance for citizens of the central provinces (such as Italia) to fight in the Roman army, after the border provinces (and main recruiting grounds of the late empire) fell to barbarian incursions and political/social strife.
Another interesting military factor of the late Roman Empire, especially in the western half, was the use of the 'bucellarii' or private armies, usually raised by local magnates. These men swore loyalty to their employer, rather than the Roman state. I could see the Roman factions ITTL like Jovinus, Dardanus, Maximus, etc, using private armies -especially since money and local power had become more important to Roman citizens in the 5th century, than fighting for the "glory of Rome".
It's a wonderful timeline so far, and I like the way it is written, I think the "fustercluck" as you put it, really adds to the sense of turmoil in the Western Empire. Great map too, keep up the good work!