Then the British build a few hundred more flower corvettes. They were dirt cheap and good enough to face any submarine Germans had produced. 16kt allowed it to match convoys, had a gun to make sure submarines don’t surface and depth charges to finish it off. In fact with 250k pounds a piece you can make 14-15 of them for each type VII Germans can build. Building battleships for Germany did many positive things, for one it at first allowed a detente with Britain. Britain hoped Germans would build a mirror image of RN since that is the easiest thing to deal with. They didn’t want Germans to go full Kreuzerkrieg or Submarine and if they did they’d know it’s aimed at them.
Second only a few ships in British arsenal were capable of matching speed of Bismarck when it came out. They all tied up two British battleships to deal with them. They forced Britain to also modernize and develop their own forces to counter them rather than submarines.
Please remember submarines of the period are pathetic. You have a few days worth of air. If enemy is willing to wait you out they will kill you. You are easily found with Sonar passive and active, hydrophones and more, as long as enemy is watching. Long range patrol aircraft like Catalinas are death. Slow moving escort ships like corvettes are death. The diving depth is shallow. The underwater speed is 6-8 knots and that is making so much noise anything in 20kilometer radius will detect you do you can’t hide while corvettes make 16, destroyers 37. Torpedoes are unguided and slow. Enemy ships changing course almost guarantees a miss. A lot of torpedos were also unreliable. On every side. Germans had issues with magnetic detonators, British with depth keeping, Mark 14 was abysmal for years. Materials that keep submarines quiet, such are rubber are impossible to import to Germany once war starts. Quality of the crew has a massive impact. If they are careless and make a sound when they’re not supposed to everyone dies. If officers are uninspired or non enthusiastic they will not achieve sinkings that are required. U boat aces were rare. Problems go on and on. You can’t base your entire navy around a single thing pre war and hope it doesn’t get countered and hope it works out.