I do agree that the OTL strategy of FWD Austin’s and RWD Morris’ was the right plan. The problem was the terrible execution with things like the Maxi’s awful gearchange, something which should have been sorted out in development.
Which is why after the ATL FWD hatchbacks have been launched, all subsequent FWD models (including the Maxi and possibly even the Princess) should have replaced the in-sump gearbox arrangement with an end-on arrangement. Interestingly another BMC precursor to the FWD cars was an early 1950s FWD Morris Minor prototype that featured a transverse engine as well as end-on gearbox layout, which was developed prior to Alec Issigonis moving to Alvis though for some reason decided against the end-on gearbox arrangement.
A no BL scenario would have still meant Issigonis being sidelined to some degree at BMC despite carrying over his ideas for the 9X and E-Series engines that would have been properly developed and emulated the later Volkswagen EA111 and Volkswagen EA827 respectively (given their apparent similarities).
The 9X/10X projects however potentially had a similar weakness with regards to gear-change despite featuring a new gearbox layout as well as an all-new engine and overall clean-sheet design, with the gear-change being unfavorably compared to the original Mini and Clubman as well as the Autobianchi A112 Abarth in what was otherwise a favorable comparison test for the 9X prototype.
The sensible thing would've been to put the Rover V8 in all of their expensive cars, even Jaguars (which they wanted to do with the XJ40 but engineers sabotaged this plan by making the engine bay too narrow). The Rover V8 was an extremely reliable engine and very well suited to the US market since buyers and mechanics were most familiar with V8 engines. And by sticking to one engine, it would've reduced tooling costs.
The Rover V8 could have only been useful had Rover been allowed to develop it further to feature Quad-Cams, 32-valves and fuel-injection on top of larger capacities as was planned for the Rover P8 project. Otherwise even though it was partly their fault the P8 was cancelled, Jaguar could have been justified to reject the Rover V8 as it was in OTL where it could be dismissed as technically inferior and negatively impacting on Jaguar's prestige (being the engine equivalent of the Cadillac Cimarron with a similar potential to kill Jaguar). Though the notion of a Rover engined Jaguar did not appear to get far beyond a Daimlerized version of the Rover SD1.
However if Jaguar were part of Leyland instead of BMC, Jaguar would have had the option of using the Daimler V8 between the XK6 and V12 that was capable of being enlarged to 5-litres (with the power of the 4.5-litre being understated being more than 220+ hp), a rough 60-degree V8 derived from the V12 and the Triumph V8. The latter which had it been developed properly could have been quite an asset to Jaguar as it was capable of displacing 2.5-4.0-litres and with Saab's developments of the Slant-4 potentially allowing for displacements of 4.2/4.3-5.0-litres. Buying Jaguar time to develop their 1980s modular engine family much earlier that in OTL under Ford ownership end up forming the basis of the Jaguar AJ-V8 yet was capable of producing anything from a 4-cylinder to a V12.
And while it’s clear that BL should have gone for hatchbacks I think I read something on AROnline.co.uk that British car buyers of the time didn’t like them, which is supposedly a reason why the Mini remained a big seller for so long. The suggestion was BL was so dependent on the UK market that it based product planning decisions largely on it, while companies with a more European focus went for hatchbacks and this paid off as British buyers cane round to them during the 70’s.
The problem with that explanation is that they made the Allegro and Princess look like hatchbacks but with none of the practical advantages that come with it. I read it was because the Maxi was to be the company's hatchback and no other car was allowed that selling point.
Another factor was the OTL Maxi's weaknesses with the styling and having to carry over the centre section of the Landcrab, which made the Maxi a bigger and heavier car then it should have been with slow sales partly being the cause in preventing BL from rolling out hatchbacks on other models. The Maxi was originally suppose to feature a similar wheelbase to the later Austin Maestro and like the latter feature a 1300cc engine at the lower end of the range.
The Maxi needed amongst other things new styling akin to the Pininfarina 1800 and Aquila to go with the hatchback bodystyle, an end-on gearbox layout and a wheel-base of 100-inches or a shade below with a length of around 155-inches (making for a lighter car). Combined with properly developed E-Series engines capable of growing to 2-litres in 4-cylinder (think 2-litre EA827) as well as a 1300cc entry-level model (either E-Series or more likely A-Series) and you basically have an earlier Austin Maestro with Hydragas and contemporary styling featuring EA827-like engines that precede the Volkswagen engines by 3 years (or potentially even earlier).