For Germany would be better when Italy become neutral. So no war with jugoslawia and complete concentration of all armies against France.
Yes, at least it would be best for Germany stay out. Altough Italy can still take Yugoslavia. There is not much what Britain can do beside ranting.
But is more important what this mean for the German population and the occupied polish peoples and the jews.
Nothing good. Altough without Barbarossa Germany might delay or at least slow down Holocaust. But final goal is still extermination of all of Jews and most of Poles.
The nazis say the Germans for 7 years and more than Stalin is the devil and and now he is a allied or a good friend?
No one believe this.
I would say that alliance is ratherly "enemy of my enemy is my friend". If Axis win, them will have immediate split.