The A-A Line will probably be the logistical limit of what the Axis could achieve. Japan might also come in if Moscow falls, as that was one of their criteria for entry into the war.Assuming all of this happens and the USSR is pushed back past the Urals (and effectively knocked out of the war) would the WAllies continue fighting against an extremely formidable Germany that can now direct almost their entire war machine against them or would there eventually be a peace like in AANW with Germany left in charge of the continent?
If by 1942 the Soviets are in the process of collapse I think the Wallies would go for an invasion of France ASAP (probably by September 1942 at the earliest even if curtailing offensive plans in the Pacific) and see how that goes before deciding if they needed to negotiate. At that point even IOTL negotiations weren't off the table; IOTL that wasn't until FDR's January 1943 declaration of unconditional surrender. I do think that the Wallies would be much more willing to negotiate a final peace deal rather than a quasi-peace, which basically gives the Axis a free hand in Eurasia due to lack of being willing to pay the price to defeat the Axis in Europe.