@wiking
I don't understand why you consider that France's Fall is a given in a scenario with Italy in the war on the Allied side since 1939.
1. The Allies have far more units on Theater than OTL :
The French have the units from the Armée des Alpes (it's two Corps and five first line Infantry Divisions even if you disregard the four Forteresse Sector and the F-17 tank battalion) and from the Armée d'Afrique (Without the forces in Morocco and the garrison troops, it's two Corps, four or five second line Infantry Divisions, one Cavalry Division, a number of Cavalry regiments and two D1 tank battalions).
The UK have, at least, one more Infantry Division from the Middle-East and they might have the 1st Armoured operational by taking personnel and equipment from what will become the 7th Armoured.
I don't know what the Italian will sent for sure, but I think a five division expeditionary force is a minimum with one Armored, one Celere and three Infantry Divisions in two Corps.
That's a non trivial amount of forces (16+ Divisions) and most will be in strategic reserve.
In the air, the French will have more units in Northern France, kipping only reequipping units in the South. It's not much, but it's something.
2. The German forces are more stretched than OTL :
Even if, like you said, the German don't need much forces to cover Austria, they will still need to deploy more forces there. It will be probably five to ten Infantry Divisions, mostly third line with maybe one or two first line.
Plus, the Luftwaffe will need to cover Austria. With 20/20 incite, we know that the Italian Air Force was a paper tiger, but the Luftwaffe don't know that for sure (They might suspect it). So that's some Fighters (maybe 1 or 200) staying in Austria.
That's some (minor) more forces tied up outside of the Western Front. It's not much, but those will be missed, specially if the French Front isn't pierced immediately.
3. You can't squeeze much more forces on the Dyle-Breda Maneuver :
OTL, the British were already making noise that they didn't have enough terrain to deploy correctly with the 7th French Army on their left.
4. The Allied reserves will be more effective :
OTL, the French reserves were split in four parts : 1 to support the forces in Belgium, 1 to support the Maginot Line, 1 to cover the Swiss option and 1 central in Champagne.
OTL, the Luftwaffe effectiveness against the reserves was magnified by two factors.
First, the French reserves came piece-meal. It's a strategic and doctrinal mistake from the French High Command which might only be change on the margin : with more reserves directly at hand, Gamelin and Georges might be more willing to engage more rapidly and massively the reserves.
Second, after the first few days of fighting, the reserves came form afar (mostly from the Maginot and the Swiss pools). They were dropped disorganized at some train station, needed to concentrate and reorganize, and then walk into the front threw predictable path. All that under the total air dominance of the Luftwaffe.
I suppose that the "new" ITTL reserves will mostly be deployed in Champagne, including the Italian Expeditionary Force. It's central and it have the military infrastructure to accommodate those forces (OTL, the 7th Army was stationed there before the Breda variant was chosen).
5. It can snow ball :
I'm aware of the advantages of the 1940 German Army OTL, but even with them OTL, the Battle of France was far from a walk in the park with some very close calls (the Landser who took an unfinished bunker in Sedan making it possible to roll the line, the two survival of Rommel, the multiple times were German generals disregarded the orders to stop during the Sickle Cut, ...).
If you take into account all those changes, the German breakthrough is not a given at all, simply because the Allies have organized reserves in place.
On the Norway Campaign, the major change I can see is that the Allies have even more naval assets. After all, the Mediterranean Fleet and the French Fleet were deployed to deter Italy OTL.
So I can see ITTL an even bigger Home Fleet, possibly reinforced by the French Force de Raid, deployed in three squadrons of two battleships and one aircraft carrier and the two battlecruiser squadrons.
By adding some ships, you dramatically increase the chances of interception of the German ships, specially for the Trondheim and Narvik invasion groups.
Edit :I agree with your last post
@Michele, but I think a 1938 POD is too soon and it might butterfly WW2 with no Anschluss and no Munich. I'll prefer a POD in 1939 with Mussolini taking seriously his role of guarantor of the Munich Accords and, when the Nazi take Prague, he goes pro-French and pro-British and guaranty Poland. Like you say, the price might be Ethiopia and economic and commercial support.