As mentioned by others do not expect the Germans to get off easier because a Prussian military junta (against whom the French and British largely see themselves as fighting) has seized control. France and Britain will be keen to avoid a stab-in-the-back myth, and in addition to ideological objections to Prussian militarism, conclusively driving home to the Germans the lesson that
they lost will be a necessity.
Agreed with this. Indeed, Britain and France are probably going to want a Germany which is strongly under their influence yet at the same time strong enough to confront the Soviets (with Anglo-French assistance, of course).
That said, though, what exactly do you think that the final peace treaty is going to look like in this TL?
There is a fundamental problem with the German argument which they will make that they are necessary and vital to defend Europe against communism : this is the same argument that they have made for twenty years, and in particular were fervent proponents of it under fascism. The bulwark of the capitalist, European West is Germany which will defend against the (eastern slavic) Communists. This is unfortunately for the Germans, going to appear very much as spent currency for any German regime which wants to emphasize their anti-communist credentials. Germany after all, not only failed to act as a bulwark against the USSR, but conversely allied with it in a war of aggression against Poland, and readily acquiesced to Soviet conquest of the Baltic States, and part of Romania, as well as the attempted USSR conquest of Finland. Indeed, in the Finnish case, Germany went so far as to block international attempts to provide arms and volunteers to the Finns. Germany is more than simply unreliably anti-communist : by 1940 it will be easy to write that it is a natural ally with the USSR, which seeks to carve up Europe with it. Nor can the Germans claim that this belongs to just one government and that Hitler was insane while the rest of them supported an anti-communist policy. German military men, despite being fervently anti-communist domestically, went along without objections to allying with the USSR, and cooperated extensively with the USSR during the Weimar Republic - when Germany and the USSR were the closest thing the two nations had to international allies. Everybody in Germany is implicated in this, from the moderate left under the Weimar Republic to the militaristic far right.
If a Germany as a state exists post war, it'll be dis-armed and not be viewed as being trustworthy enough to be part of a military coalition against the USSR. As has been proposed in Blunted Sickle a few times, instead German contributions for defense against the USSR might take the form of direct payments to France and Britain to enable them to build up the powerful atomic forces that they'll need to provide for long-term defense against the USSR. Certainly, I can never see the Germans being allowed to be anything close to an independent actor, given that they blew that chance with Hitler, and the evident unreliability or outright pro-Soviet nature which German politics and geopolitics induces.
If Britain and France are OK with looking extremely bad in the eyes of the international community, then maybe, just maybe this could occur.
However, where exactly are the new settlers for the Rhineland going to come from? After all, France's population was already stagnating during this time.
If the Allies actually did expel millions of Germans from the Saar and Rhineland, then World War II would be a lot more morally grey, since the true horror of the Nazis was never unleashed and the Allies have just committed mass ethnic cleansing with hundreds of thousands of dead Germans amongst the millions of refugees.
Ethnic cleansing wasn't viewed in the same way pre-WW2 (or even in the years following WW2), as it was today. Not only was ethnic cleansing accepted without excessive moral qualms, see the post-war cleansing of Germans from across Eastern Europe, but conversely, it was even lauded in some cases : following the Turkish-Greek war the result was the near whole-scale expulsion of Greeks (defined as Orthodox Christians), from Turkey, and the also near-whole scale expulsion of Turks (defined as Muslims), from Greece. This was not looked on with indifference by the international community : rather it was actively facilitated by the League of Nations and was lauded as a step towards peace. Now, of course the Franco-German situation is different, it is not a mutual exchange in the case of the Saarland, but ethnic cleansing doesn't fall under the genocide label like today. The French could do ethnic cleansing if they wanted in the Saarland, on the heels of various German war crimes including but not limited to the Holocaust being released, without much of an international response.
Whether France would actively do such a project is questionable : personally I'd lean against the French ethnically cleansing the Saarland. But by the moral standards of the era they could get away with it.
I furthermore doubt that it would be that bad, beyond the moving people out of their home region. The death tolls for German post-WW2 population transfers happened under bad conditions, in devastated countries with insufficient food supplies for their own people, over long distances, with vengeful populations surrounding them, . By contrast a decision made to depopulate part of the Rhineland of Germans (which I doubt the French would do, but just to run with it), occurs in a situation with less pan-European devastation and famines, much shorter distances to other co-nationals, and with only the French army, which wouldn't engage in excessive state-sanctioned violence, being the French actors engaging with the Germans. I don't know how high the death toll would be but it probably would be a few thousand. That is terrible of course, but compared to the war crimes that Nazi Germany committed - which would include in a no-Fall of France scenario immense devastation and brutal mass murder and starvation exacted on the Polish people, massacres of French colonial troops and occasional massacres of standard troops such as those they committed against the British, plunging Europe into another horrible war, unprovoked aerial bombardments, and probably a less extensive but even more intensive Holocaust as in a Blunted Sickle there has been convincing evidence presented about that - this is well, pocket change.
For what it's worth, Britain and France didn't insist on unconditional surrender from Germany in 1939-1940. Indeed, if they wanted to impose such draconian peace terms on Germany, why not insist on unconditional surrender from the very beginning?
There's no need to inflame the Germans with ready-to-use propaganda until one's actually at the stage of being able to press such propaganda home...