PDF has been pretty explicit that the Brits and French aren't going to dismantle Germany cuz that would make reunification by the strongest military power (Prussia 2.0) a certainty. Instead, theyre going to dePrussianize and demilitarize German culture and society. There's no regionalist separatist sentiment anymore.
The thinking is that they've got two options: split Germany up into multiple countries and ensure that they don't reunite, or allow Germany to remain united and fundamentally change the culture. Both in reality are a recipe for a long commitment - for either they have to fundamentally change the culture to ensure that a militarist state like Prussia can't rise again, and in the former they have the additional commitment to preserving this settlement by force if necessary. The critical point on cultures is that you need to ensure that a clear majority in any one state is anti-militarist - and this is significantly easier in a united Germany.
The reality is that the decision to unify Germany is seen to have been a done deal for a very, very long time - the only fight (and it was a huge one) was about who would be in charge. Ultimately, that was won by a militarist, aggressive state - and Germany promptly started invading the rest of Europe. Splitting Germany up is just guaranteeing a repetition, possibly in a hundred years or so when the French and British aren't on the lookout for it. However, at the same time this war isn't seen as the fault of the Nazis but of the Germans/Prussians (the two being rather interchangeable) - and crippling and reforming Prussia by itself, particularly with help from the rest of Germany, is seen as a realistic task - particularly since the Poles are eyeing-up very large areas of what was once Prussia by way of compensation for the Molotov-Ribbentrop pact.
It isn't all written yet, but what I have in mind is:
- A loose federal constitution. Not hugely different from OTL, the main difference being that the federal government isn't going to be allowed any armed forces and certain powers currently allocated to the constitutional court will be retained by the occupying powers (e.g. allowing the military police to carry out searches without warrants).
- A very long military occupation somehow paid for by the Germans. The question of how to tie the Entente forces into continuing the occupation a long way into the future is one currently being given a lot of thought.
- Prussia getting a lot smaller to compensate Poland, with the displaced people spread out all over Germany rather than in the rump of Prussia.
- Japanese-style pacifist additions to the OTL basic law. This is likely to require fairly minor modifications, actually - the basic law is already quite limiting.
I don't see the logic there. The question isn't 'occupy or balkanize', the occupation and demilitarization is a given. After the occupation has been going on for a while and there's increasing call back home to draw down the forces used for said occupation, the question of in how many pieces Germany should be will probably be coming up. It also seems probable that Germany will be built up similar to OTL, from the smallest pieces (Kreis, I believe?) upwards. However, when building Germany up piece by piece, the most obvious 'natural' stopping points would be historic borders and, if some of those pieces get different treatments as a result (almost a given since there's people on the ground with different opinions on how to best handle the issues) then even if there's little intent now to divide Germany, there will be enough people calling for it that the idea would at the least be seriously considered.
A lot of that I agree with - the Entente occupation authorities will start by handing over dog catching and rubbish collecting to the Germans, and working their way upwards. The problem is that the powers of each layer of government aren't being created out of whole cloth when handed over to the Germans. Prior to handover, there wasn't nobody in charge of the town of Wienerschnitzel-am-see: instead Major van Klomp of the Dutch army would have been exercising them on behalf of the occupying powers. That will apply all of the way up - and because there already exists central power when Germany collapses and armies always like one person to be ultimately in charge, that means it's going to take a conscious decision and a load of work to partition Germany.
Historically, wasn't there a fair amount of refugees leaving Prussia to avoid being captured by the Soviets? Some/many? were repatriated back at some point, but neither a Prussian exodus or repatriation is likely to be the case in this universe, correct?
In addition to the large number of refugees running from the Soviets there was an awful lot of "population transfer" after the war where ethnic Germans were expelled from their homes outside the new borders of Germany, frequently violently and often with no more than the clothes on their backs. Expecting to avoid this ITTL is wishful thinking, I suspect.