Very good point, and not easy to work around, unless by estalishing an "international conrtolled" corridor (Danzig-like) under thr protecton of french-italian troops (extending it to a piece of austria, too).There is still another argument against a separatist Bavaria, of all places, as contrasted with a separate Saarland or Rhineland: in order to prop up the separate regime with troops, you need secure supply lines, and these lines are not secure if they run across Baden or Württemberg territory that is still part of the Reich.
On the other hand, since what is about to happen in Italy, things would crumble in a few years
Ah, but that way french would appear explicitly as the bad guys wanting to annex land.And then there is the question why a French government should go to the trouble of installing a separatist regime at all. Why not take a desirable and militarily defensible chunk out of Germany beyond Alsace and Lorraine, that is contiguous with French territory, and turn it into a few new French departements?
(not that people would think otherwise in case of a french-puppet slice-of-germany state, but that way they wold save the appearence, at least)
Anyway, I'm afraid that being what I am makes me cynic
My point is that if in the Xyz state a foreign power go to mister little-zed and says him: "why not to secede the z province from the Xyz state? that way you will not be mister little-zed anymore, but you will be President Little-Zed of the Sovereign and Independent New Z Banana Republic.", then at least mister little-zed will turn into collaborationist (and so his family, and so the newly-appointed ministers of the Sovereign and Independent New Z Banana Republic, and the new shiny high-bureaucracy, and their family, and also a few lunatics who really wanted some sort of independence).
What I am saying in short is that some support is going to materialize, since where you formerly had 1 set of highly-payed jobs (Xyz) now you have 2 (both Xy-with-claims-on-z and the Sovereign and Independent New Z Banana Republic)