Getting back to the initial scenario what if Austria did intervene in the Franco-Prussian war fairly early on. In that case the Prussians would probably lose. Before the French armies that were beseiged due to crap leadership have to surrender the Prussians have to withdraw forces eastwards. Revolt in Hanover and other areas annexed by Prussia after 1866. The Prussian military struggles hard but is eventually overwhelmed by the superior numbers of its opponents.
Austria takes the chance to establish a fairly united Greater Germany including their German speaking lands and mixed areas like Bohemia. The Prussians and some nationalist may not like it nit they don't have a say in the matter and a fairly decentralised but larger Germany settles down.
After all the OP, unless I missed something, never said it had to be a Berlin centred one, just a Germany including Haspburg lands.
Steve
The problem is that Bismarck had worked hard to prevent this happening. He was essentially being guaranteed against Austria by Russia, IIRC, and the Russians would hvae politely but firmly told Austria to stand down. They were certainly not been content with the formation of an enormous Germany to oppose it in the Balkans.
And will France, the other victory, be so keen on this Greater Germany? It hardly balances Europe. I think even if Russia is somehow convinced to tolerate Austrian entry and Prussian defeat, Russia and France together will stop Austria getting big-headed.
And then there's the question of whether the empire in the Danubian basin can be maintained. A Greater Germany any more centralised than the Bund limits Austria's freedom to act, thus increasing Hungary's, and as seen over Serbia in 1914, even under the dual monarchy foreign policy did not always align.
And
then there's the question of how decisively the battered Austrians, who probably have to eye Italy, too, can tip the scales against the formidable Prussians. Given how crushing a victory they won, I can't imagine them sustaining a crushing defeat. The NGF is probably staying intact. I'd imagine a peace settlement as being a Russian-mandated restoration of the status-quo, leaving aside why Russia hasn't calmed Austria down earlier.
I also think the idea of revolts in Hanover at the time when it was public pressure that forced Bavaria and indeed Bismarck to go through with Lesser Germany is nonsense. In 1871, church bells were rung and flags draped over the Brandenburg gate. The idea that Germany was imposed by Prussia is in my opinion untrue: Germany was imposed
on Prussia.
Why does Greater Germany make German nationalists unhappy?