According to this:
" Polish and Philippine forces seem to be gaining the upper hand against the rebels"
I would say yes.
So would many if not most OTL, those with more specialized knowledge and longer 'planning' horizons as well as those in the A4 of the AANW-universe would not agree and in fact they would be 'right' and you wrong. Now on a moral and "tactical" level this would seem a much more "black-and-white" rather than gray area and while it's actually a dark gray it is actually "black-and-white" and Stettin rebels specifically drag the general population over into it being a necessary "black-hat" situation. More so in the eyes of the A4 and likely a lot of the population simply because the 'tactical' situation was actually immaterial to the overall strategic and long-range situation which is what the A4 focuses on.
No need to murder a city when you can win conventionally.
You seem to have missed that 'winning conventionally' was impossible under the circumstances and that while the local tactical situation was going well the overall strategic (and again this was always the A4's forte) was going to hell in a hand basket with several very dire long-range repercussions and dangers. Lets again review the expanded background facts and right up front admit that we don't fully share the world-view of the of the occupants of the AANW time line:
Let's review
1. Prussian Uprising begins on April 11th with carefully planned attacks on Polish occupation forces. 2. Rebels are found to be using weapons originating in China, although tracing their movement from Asia to Stettin proves to be impossible. 3. After five days of fighting, as Polish and Philippine forces seem to be gaining the upper hand against the rebels, all Treaty troops suddenly withdraw from Stettin at sunset on April 16th.
1, Carefully planned attack (i.e. professional) attack against Peacekeeping troops (who actually function more like a U.S. State Patrol or State Police primarily, but not exclusively aimed at ensure the Treaty prohibitions on Weapons and weapon tech are being followed, while also serving as a "heavy SWAT" team for local police in case of bank robberies or hostage situations). The Poles, especially, are good, their forces rotate between working in the Statelets and as peacekeepers as requested through the UN elsewhere, including on the Chinese/Korean Border. Despite that they were taken completely by surprise attacks against multiple locations across the entire region.
2. The rebels were not using WW II surplus weapons or double barreled hunting shotguns and bamboo spears. They were using thoroughly modern weapons including a lot heavier gear than a few assault rifles, that match the standard issue of Chinese forces (which are very similar to Soviet weapons). There is no reasonable explanation for how the weapons made their way to the Stettin area that doesn't include serious, high level, smuggling. There is also no really reasonable explanation for how men and women who should never have any practical knowledge of using militarily quality weapons simply by watching TV.
3. These supposed amateur untrained, poorly led rebels fought what amounted to a BRIGADE of combat veterans ( equipped with, drones, LAV, Helicopters, and access to real-time satellite intel to a standstill for FIVE DAYS
As CalBear notes this is a VERY worrying and potentially highly dangerous situation that calls into question both the occupation forces competence and ability to retain control over the German Statelets BUT the very nature of the local control and/or intentions of the governments and people OF those Statelets. This is a highly trained, highly motivated, well armed and well planned rebellion that while being locally 'controlled' pretty much proves that the same or better forces and planning could be in place elsewhere. Either biding their time to learn lessons from this operation or awaiting a planned general uprising possibly in conjunction with outside forces also attacking the A4 as a whole. There is no other way to see what's going on from either a military or strategic point of view and it represents a clear and present danger to the occupation, the A$ and World Peace.
"Tactically" there's no question of the A4 gaining the upper hand and destroying the overt "rebels" actually engaged in fighting the occupation forces in Stettin itself. That's the 'easy' part and arguably (though not likely if the rebels are as well prepared as they seem) doing things the 'hard' way might glean some intelligence about how deep and far the 'rot' in Prussia specifically and the other Statelets runs and maybe shed some light on the obvious 'state' actor that supplied the weapons and training. But that's going to be costly in lives on both sides and more directly vastly more lives in ALL the Statelets because the assumption has to be made that this was no limited to Prussia. So once the 'tactical' job is done the 'strategic' job will begin of dismantling the government, mercantile and social order of each and every German Statelet to the bedrock to see what other 'rot' that might have been missed essential destroying what public trust has been built up since the end of the War, disrupting and likely collapsing the economic and social order that has been created and generating at least another generation of "ill-will" that will extend the occupation time table for likely at least another several decades if not half a century.
"Strategically" that would be a disaster because on the most basic level it is highly unlikely that such an effort and organization as would be required to plan, train and carry out such operations at Stettin are wide-spread because of the needed coordination and size would inevitably lead to leaks and slips that would give such a wider organization away before this point. Essentially tearing down everything that has been built to this point in search of that possible "New Germany" organization will entail millions of dollars in both real and fiscal damages and likely millions of lives over decades of time and generate hundreds of thousands if not millions more disaffected, dissatisfied, and outright hostile 'recruits' for future rebellions.
Or the A4 can perform "strategic surgery" with a targeted non-nuclear 'strike' to clean out the current 'cancer' and prove a point about the limits that they will allow in opposition and to make it clear that violating those limits have consequences that are too terrible to contemplate. Stettin burned which arguably was the smart (if still "bad") choice to make but under the circumstances the only other option was much worse. Keep in mind that the AANW experience was and is that the "civilian" population will for the most part fight right alongside the military to 'preserve' their institutions and so there's not a lot of 'sympathy' for those that don't actively oppose those the A4 is fighting. Those 'civilians' that don't flee the fighting (if they can) will be seen as passively 'supporting' the Rebels more than victims and therefore will not be likely seen as 'non-combatants' in the normal sense and in the AANW-verse passive support is not seen differently than active support.
But I suppose to A4 German lives are worth less than lives of other people. So they saved the lives of Peacekeepers who would have died in further conventional fighting and at the same time killed more Germans (both combatant and non-combatant) than the deaths that would occur from further conventional fighting.
That is exactly how EVERY military and strategic doctrine sees things, and they are very much not wrong in that "your" people are always more important than those "opposing" you either actively or passively. (This is very much why "militarization" of law enforcement is always a bad thing because by it's nature it removes the "police" from being part of the community to being more important and valuable than the community itself. It's also very much why having the regular military try and 'police' or regulate civilian populations is a very bad idea, they operations and doctrines are very much not-compatible)
And no it's likely the 'deaths' and other damage of simply proceeding with a 'tactical' battle would have been much, much worse.
Randy