I don't really think that it's impossible to take Yugoslavia and Greece.
It's mainly a question of time. If Mussolini attacks Yugoslavia in 1940, he won't have enough time to invade Greece too. The italian army was still an infantry army and wasn't structured for a blitz like war. This mean at least a year long war. After that Mussolini would have to spend another year to reinforce the army. But by the 1942 he would surely be pressured into war by the british...
The Italians tried this IOTL, and they lost. This wasn't a terrorist campaign, the Italians were actually driven out of most of the interior.
But the italians could prepare better in this timeline and they won't have to bother with the british...
The Soviet Union can probably ensure that the Greek partisans are better equipped than the Italians as well.
Are you sure? I think that russians will have enough troubles with germans to look into the "side-show" of Greece
It's an old military truth that getting there it's the easy part, staying there it's the tricky one.
The problem of puppet goverments and partisans depends mainly as the actual conquest is managed. If the italians are smart enough to avoid "SS behaviour", they could avoid the worst of a resistance movement. After the war, Italy will retain at best few territories (Dalmatian ports or islands) while Yugoslavia and Albania would become indipendent democratic nations with strong "ties" to Italy. There's the possibility of a communist insurgence right after the war, but after that I don't think that Stalin would risk nothing more he did IOTL.
This was the same complacent Greece that IOTL was rearming as fast as it could afford to and only the premature Italian invasion stopped it from having superior equipment to them - who they had long planned to fight.
The greek equipment wasn't superior to the italian one and Mussolini hadn't prepared anything: it was largely a thing made up on the moment to imitate the germans conquests. IRRC the whole invasion was decided three weeks before the first attack...
If Mussolini's been fighting Balkans wars, he's not had the time or resources to modernise his armies, and they will have learned exactly the wrong lessons about modern warfare. The Germans will slaughter them even if they're falling back on other fronts and on their last legs. There ill be no strategic gains to be had as he'll have contributed nothing to the real war effort and these humiliating defeats will mean he gets nothing at the bargaining table.
Wrong for two reasons. First they would be fighting on mountains, where germans tanks and planes are of little help, while the italians had a lot of experience (for the matter, IOTL in 1945 an italian mountain division , Monterosa, stopped and forced to retreat the 92 american division).
Second Mussolini didn't have to advance in german territory at all: he would just to keep them on the border, while american and british troops would pour on italian ports. If this happens in 1943, there won't be any need of operation overlord, since the strike to Germany could easily pass through Austria.
Italy can't be neutral, and they won't have a domain. The Soviet Union was good at running guerilla movemewnts, and the Italians wil be expelled from the Balkans post haste, particualry as their regular forces will be largely destroyed by the Germans towards the end of the war in this scenario and need to be completely rebuilt.
The post war situations would largely depends on how succesful is the red army in this ATL, but if the war ends an year before, as I think probable, USSR would have a smaller "empire" this time. Anyway the idea that the Balkans would fall to the communist after the war is wishful thinking: without the red army this is not going to happen. And remember: IOTL Nor Greece, Austria or Turkey felled to their communist movememnts and Yugoslavia was indipendent from Moscow.