It seems to me that Danubia actually has a stable core of Bohemia, Austria, and Croatia, with the others loosely attached. The Austrians dominate the nation in practice even if not officially, so they're quite obvious. The Bohemians would realize that their choices are a union with Germany, a union with Austria, or puppetization by Germany, so staying with Danubia gives them autonomy and influence over the Confederation as a whole. The Croats can either cleave to Austria or risk dealing with the Serbs alone; given recent history, the Serbs are clearly insane, so sticking with Danubia is valuable protection.
That core isn't a Great Power on its own, but it's a second-tier like Bulgaria (or Italy, though Italian weakness isn't evident ITTL) and a valuable ally to the German Empire. The Danubian collapse might be overblown.