This is conventional and general wisdom, but I think AH after victory for the CP in a short Germano-French-Russian war would be a clear exception. This is not at all analogous to European powers trying to dominate the Ottoman Empire, or China--though I will note, the British were doing pretty well for themselves taking over the Chinese court via imposing the "right" to administer key things for the whole empire, in the mid-19th century.The problem is assuming the Germans think that one big empire would be eser to control then a bunch of smaller, weeker countrys would be, which has never been the case historically.
But in these cases foreigners with zero sympathy for their victim and no respect for their culture and especially not the ruling elites are horning in where they are strangers. This is quite different! The German Empire just stood by the Austro-Hungarians when their case for landing an ultimatum on Serbia was pretty dubious and inconvenient, exposing Germany to heavy war with both France and Russia. The AH army would probably perform about as fecklessly against the Russians as OTL--but the German army mauled the Russians worse than the Russians mauled the Austro-Hungarian forces; here I presume that seeing France in collapse and themselves very much on the back foot and clearly about to face a Germany that can settle things with France and turn full force on Russia, even such an idiot as Nicholas II will see the writing on the wall and settle, at considerable cost, but with his regime intact for the moment. (All the conventional "of course AH is doomed" not taking into account my thesis that Germans will prop it up reasoning will then apply to the Russian Empire pretty strongly, but the various factors that brought them to revolution in 1917 OTL will not have had three years of brutal defeat to work--recall Russia already had another revolution after a much less costly defeat in 1905, which is why I think it will be Russia, as long as it remains under the Romanovs anyway, that will be shaky. Perhaps if Nicholas can be shuffled off somewhere, and someone with good sense (bearing in mind I am factoring for the whole Russian ruling class being pretty brutal) runs in effect a regency pending Nicholas's death which naturally would be many decades hence, they can stabilize it for the Tsarevich, who however was always at death's door due to hemophila--perhaps he can manage to sire an heir before he dies, and some grandchild of Nicholas's can be a real Tsar again. But more likely they will screw it up and Russia will be very volatile indeed, until something drastic happens).
So Germany pulls AH's chestnuts from the fire. It is militarily and economically in quite a position to gobble up the entire Habsburg empire whole--but I think they will hardly want to encumber themselves with direct responsibility for all that backward development and ethnic pots boiling over. That will be the Habsburg monarchy's job to manage, for which in effect the German Reich will pay them to do.
Germany's biggest liability in this juncture is Wilhelm II and his autocratic and arrogantly chauvinistic clique of course. Again and again Silly Willy exacerbated Germany's problems beyond all reason. A 1914 victory, even one delayed to say early 1916, is likely to give this reactionary clique quite a bad case of victory disease.Pulse it's not like German leaders ever had much respect or really liked austrea-hungary, hell Wilhelm II sade that when austrea collapses the German unification would be complete right to franz josifes face in like 1907-08, not only dose this show how bad Wilhelm was at diplomacy but shows how dependent austrea Hungary was to Germany considering the aliance stade intact to ww1 (and also explains why austrea-hungary was so worried that Germany woulnt support them during the July crisis ) combine whith the prity bad performance during ww1 itself (to the point that high ranking Germany officers are saying they had been shackled to a corpse)
I am however speaking of Germany's rational interests and opportunities to get them met efficiently via propping up the southern Empire. Germany was dominated by Prussia, by Prussian interests and Prussian officials. But it was not all Prussia for one thing; other Germans might not entirely share the Hohenzollern contempt. Insofar as religious bigotry mattered still--that would be playing with fire considering how many Catholic subjects of the Reich there were, and how the federal nature of the empire meant Bavaria and other southern kingdoms were predominantly Catholic and run by Catholic dynasties and leaders. Plus more of them in the Prussian holdings particularly in the Rhineland. Indeed I gather this hatchet was largely buried by 1914, in part because Bismarck (the Kulturkampf being largely one of his lapses in statemanship, though I also think the Catholic side had more blame in provoking it than is usually noticed--still Bismarck handled the real issues pretty poorly) had passed on, in part because the Reich was integrating despite its self-Balkanization which de facto meant Prussian indirect rule anyway.
Even a relatively easy war would still be no walk in the park and German citizens would have been heavily taxed in every way. German industrialists would profit more than suffer of course, but I am counting on them gaining more influence--not via democratic channels as I would prefer, but via inside connections to the General Staff. Zeppelin Company is one I have read up on quite a bit; war time demands greatly accelerated the advance of Zeppelin design, and greatly expanded their scale of operations; the company was in quite intimate relations with the German navy in particular. Surely the other big names we can easily rattle off in more central industries--Krupp, IG Farben, etc--are going to command a lot of respect and attention by a lot of well placed high officers of respectable noble blood. Both will see eye to eye about needing to keep the democratic rabble in line, and it will be tricky because the German commoners, including quite notably the vast majority of Social Democrats and Jews, answered the call and served honorably. It will be difficult to just slam the door in their faces; preventing them from driving home revolutionary demands will be best accomplished by as George W Bush so charcteristically with revealing malaprops said, "making the pie higher." Meaning not what his outcome predictably was in the 2000s USA, putting it farther out of reach, but what he presumably consciously intended to say...make the pie bigger. Germany must profit from victory, and the way to do that is to expand economically into southeast Europe.
You say, rather formulaically, that "upstart empires dismantle their imperial victims, they don't conquer them wholesale." Here though is an unusual opportunity. Putting Wilhelm and his trash talk into the same zoo Nicholas II belongs in, a suitably astute Reich government would ostensibly and officially just be continuing and deepening a cordial alliance with a staunch if ailing ally. It would be private German citizens who would do the work, via investment and development, of de facto conquering Austria Hungary piecemeal, and the AH royalty and nobility getting their cut, with local issues handled ad hoc, the imperial structure gives cover for this de facto incorporation of Austria-Hungary into the German system. Why should the Germans chauvinistically eat up just the northwestern parts as being German, except of course for the huge salient of Slavic Czechs and Moravians in Bohemia, and exacerbate the northern Reich's papered over Protestant-Catholic split by swallowing up enough southern German and Slavic Catholics to make the expanded Reich quite overwhelmingly Catholic demographically, at just the time conservative Catholic subjects of the northern Reich had been finding their political footing as a counterweight to the Social Democrats? Leaving these people formally under another flag and emperor would hold a lot of headaches at bay, but meanwhile the larger German system in fact sweeps up rulership of essentially all the Germans in Europe--note that quite a few cities and towns far to the south and east in Hungarian lands were in fact German ethnically. Why cut those Germans loose? Leaving them under the AH crown gathers them into the system too, as overlords in fact of the non-German majorities generally, except Hungarians in Hungary. But the German influence will tend to turn any asset the larger empire has into de facto a German asset, bolstering the cultural hegemony of Austrian Germans by association.
I see it more likely that Germany would gust let austrea Hungary rip itself apart, anex the German and check lands as religion issues have been giting less and less important in Europe sence 1866 and play the new countrys left agenst each other.
Why relinquish the claim on the whole AH empire, when sock-puppeting the southern monarchy would leave the headaches of the less important parts for the subsidized southern rulers to deal with to earn their keep, while Germans move in on a private basis to monopolize control of the profitable parts? We can't draw a border that includes just "proftable former Austria-Hungary" while throwing the rest harmlessly (to German interests) to the wolves; items of interest to German capitalists would be scattered all through the empire, islands of opportunity in a sea of liability--let the Austrians and Hungarians do the scut work of taking responsibility for the down side, and pay them to be able to keep their heads above water on that basis, while Germans skim the cream. Withal, no nasty little wars, no pogroms and massacres and ethnic cleansing to form half-assed Westphalian nation states.
Would the southern royalty and nobility, as well as more bourgeois as well as working class leaders, be resentful? I daresay yes, it will be somewhat humiliating for them. But the beauty of the system is divide and rule; most people will vent their resentments at the Habsburg system and it will be the whipping boy of progressive minded people all over the world; indeed many might hail the Germans as the good cops and blame misery on the Austrian and Hungarian bad cops. This is exactly what an astute German-AH relationship negotiated cleverly would in effect pay them to do of course--keep a lid on dangerous talk of revolution, either nationalist or internationalist, do what it takes with carrots or with sticks to keep order, and where Germans see opportunity or resources they want, stand out of their way and follow their lofty advice for how to run things locally to these opportunities.
Knowing glumly the alternative is complete collapse and the evisceration of their pretensions, I think the southern formally elite nobility and royalty will in fact fall into line for their pay and tarnished glory, and knowing these people are doing the donkey work of imperial rule of what amounts to a European colonial empire, smart Germans will pay them in cheap coin of flattery and a reasonable cut of the proceeds of profits from controlling southeast Europe. This is much more sensible than short-sightedly grabbing just Bohemia and Austria and letting the rest go to the dogs where they might wind up becoming client allies of Germany's enemies.