While it could have been worse, the Government could have opposed any territorial changes at all along a socialist ‘peace without annexations’ doctrine, in the end what Germany was willing to offer was small and simple; Southern Trent.
Yeah, that's not going to go over well.
Germany gives away what many consider core Austrian/Tyrolean territories. Even if we may be only dealing with Southern Trento/Trentino here, not Tyrol 'proper'.
If we get the Brenner border TTL too, there will be riots in the streets and Austrian German-nationalists (getting confused yet) out to lynch any German socialist they can get their hands on. (Because they will be the ones who will take the majority of the blame - no border change policy or not.) Talk about alienating ones closet ally. (And that border very much was the Italian aim - not for cultural reasons, no matter how much they like to pretend, but for strategic ones.)
However if that really is 'southern Trent' aka maybe the line up to Riva and Rovereto as the frontline often was - then they might accept it with grumbling. Not sure why the Italians would take that deal however, aside from preventing Austria to put boats on Lake Garda (again) it would hardly give them any advantage.
The traditional language line - aka the Salurner Klamm might too be acceptable - but then the naming as 'Southern Trent' is all wrong - it'd be Tento without maybe bits like the German speaking Fersental.
And that's one of the things that annoys me with that update at all: It's Germany negotiation, A-H is hardly ever mentioned.
Again: reiterating what I stated earlier: I can't really see a Third Piave-esque collapse early, in the knowledge that Entente forces were already pulling out. But even then the complete government collapse of October 1918 would still likely not happen, if the idea was that they'd just have to hold out 'until France was done'.
And even then with a victory under their belt, some concessions to autonomy to Prague made, the Cisleithanian part is basically stabilized for things to come. (Okay, simplified, but...) However the Treaty of Zürich might threaten that. After all, Slovenia is dependant to a large part of not loosing out to Italian advances. And here is Italy nibbling at the edge. And the German-nationalists are the ones most offended by territorial concessions in Tyrol - being one of the pillars of the Austrian-German alliance.
So if we get the idea that Germany is giving away Austrian territories....
However as mentioned Hungary is more problematic. But TTL Hungary didn't hold out to 'get a better deal' long after Cisleithania surrendered. That should give them some stability until renegotiating the Ausgleich is on the table - and even then the threat of a Hungarian uprising has less tooth than it appears at first. Because that'd be a revolt of the Hungarian elite first and foremost.
The real threat would be a civil war by the Hungarian minorities (and maybe Hungarian peasants) against Vienna and Budapest - but from what I know Karl should be shrewd enough to avoid that one at least - if Germany doesn't undermine him all the way.
(Sorry for my rambling - but the ambiguity and the lack of comment on 'Germany giving away Austrian territory' kind got to me. - As were some A-H is doomed comments in here. Bloody (literally) century old Anglo propaganda still working.)
Edit: I might be misremembering, but shouldn't there be a Obrenovic pretender floating around somewhere too, who might get discusses as King of Serbia?