Stalin believed that war was an important component in bringing about world revolution. So he wasn't just hoping - he was absolutely convinced of it.
And arguably he was right. It's hard to see China going Communist without WW2, or Russia Communist without WW1, and it's hard to see many attempted revolutions either.
Of course he was right in principle. Stalin was just hoping for a scenario where vital parts of the Soviet Union wouldn't be devastated and where he could instigate revolutions in Central and Western Europe.
So in theory he had a correct assumption but his conclusions were disastrous. Feeding the Nazi war industry during some crucial (potential) turning points, to create a "revolutionary climate" turned out to be a big mistake.
The demonization of Nazis (as with the demonization of Stalinism) certainly gets in the way of understanding the real mechanics of evil. But even if the Germans score quick victories on every front, I just can't see them avoiding colossal atrocities. At minimum the Jews will be forced to move to some godawful part of the world with insufficient infrastructure like Madagascar, and most of them will die. And since there wouldn't be a war interfering with the efficient "processing" of all the Jews of Europe, I rather suspect that even more people would die in such a Holocaust.
Not to mention that the Nazi occupation of Poland, Belarus, Ukraine, Latvia, Lithuania and Estonia is liable to be all kinds of dysfunctional. The Nazi policies for these regions had such a disconnect with reality that I have a hard time not sliding into worse brutality than they'd already reached by the end of 1941.
Of course, if Germany scores a number of quick victories on all fronts and then kills a few million in brutal ethnic cleansing, but eventually classifies most of the conquered Slavs as "Slavicized Arayans" or at least mixed race mongrels who are no worse than the French, that does reduce Hitler's kill count pretty substantially. Combine with some good publicity, and we could see historians seriously debating whether the Nazi crimes were any worse than the crimes of the British Empire.
Of course, that's assuming Germany is stable after his death. Nazi Germany was so messed up and adversarial in its organization that I don't think that's necessarily true.
The Nazi order was based on bad ideas, and that just doesn't end well.
Well IOTL the Nazis were pragmatic enough to allow the "subhumans" to fight for them:
https://en.m.wikipedia.org/wiki/Russian_Liberation_Army and other formations.
Lets work with the following assumptions (imho optimal non ASB ones for the Nazis):
- no Afrikafeldzug, no Battle of Britain
- no alliance with Japan
- "Barbarossa raid"
- Nazis manage it to negotiate peace deals with GB and the Soviets in 1941
West
France:
- has to cede E-L
- has to cede Madagascar
- German troops withdraw
- de Gaulle is allowed to return
- free elections in the next few years
- reparations and military restrictions are to be negotiated in a new treaty between France and Germany
- maybe GB is allowed to station some troops in France as a major concession, somwhere not to close to the German border as "peace keepers" (?)
Great Britain:
- essentially a white peace territory wise
- Great Britain has to accept the "Madagascar plan" and is not allowed to blockade Germany
Belgium:
- probably becomes "independent"
- meaning no German occupation and a relatively independent government
Norway:
- similar to Belgium
- probably more voluntary SS recruitment because of the racial bogus
Denmark + Netherlands:
- bureaucracy and government are probably tightly controlled with a German "Aufsichtsverwaltung"
- the Germans have "racial interests" in both countries, so I think they might remain firmly in the German orbit
East
- Germans annex territories
- Ukraine, Belarus, Baltic states as optimum for the Nazis
- maybe only parts of the regions mentioned above
- modified German-Soviet commercial agreement is enforced but even more loopsided and in favor of the Germans
If we have a situation like this, or a situation similiar enough I don't see what is supposed to stop the Nazis.
If they manage to get GBs approval to the Madagascar plan, GB won't be raising to much protest over TTLs Holocaust equivalent. The Allies ITTL weren't exactly covered with glory in regards to helping the Jews before the war. If the Nazis don't outright kill them with gas chambers, instead slowly letting them starve on a plague infested island while Britain watches, I don't think people would realize the montrous nature of the Madgascar plan. There is too much plausible deniability, too much uncomfortable questions about Western responsibility and too much deep seated antisemitism.
Personally I think the Nazis wouldn't necessarily aim at killing all of the Jews in Madagascar, in their perverse logic it would probably enough to "cull" them down to acceptable numbers, turning Madagascar into some tropical slave hellhole colony.
And in the East ? Imho the Nazis would quickly realize that the GPO is an impossible fantasy (and insanely evil but that wouldn't be clear to the Nazis). There would be an immediate need to connect the conquered territories with Europe, so we would see a MASSIVE slave labor fueled infrastructure construction project. The same is true for border fortifications with the Soviets. Due to the collectivized nature of Soviet agriculture it would be fairly easy for the Nazis to transform it into some kind of "semi-feudal latifundium slave labor" system. And resource extraction (coal, metals etc.) would be very slave labor intensive too.
So the "policy" in the East would probably turn out to be a massive colonial exploitation one with some genocidal elements but not to the extent that the GPO proposed. Einsatzgruppen would still run amok but without heavy fighting I don't think the Hungerplan would be realized. So the West would probably be aware about crimes but they would be viewed similar to the Holdomor.