Let's leave aside morals, ethics, what the democracies would have tolerated and all of that. Let's be practical.
In actual history, the Germans did not cause any problem at all.
They put their tails between their legs and they meekly came to the fodder pail. That's because there was fodder to be had. Nazi party members did everything they could to get a Persilschein - a squeaky-clean certificate - and/or to be classified as humble Mitläufer, insignificant followers.
Meanwhile, the Werwolf resistance fighters remained the same as most of the Nazi propaganda - pure fiction.
But if the occupiers are out to kill a few million Germans? Then this quiet, disciplined behavior disappears. The Werwolf will exist. Counting the actual party members, their relatives, the brainwashed HJ youths and a few tens of thousands of non-party member Germans who will nevertheless oppose this because of what it is, you'll have a situation comparable to the German occupation of Soviet territory.
Guerrilla always hardens the occupying army, which will mean a spiral into worse violence. Civilians will die in droves who were not party members.
Note there are many hundreds of thousands of former armed forces servicemen still behind barbed wire. Many of those were party members. When the detainees understand that party members are selected, brought in the woods and shot, there will be riots in the camps; some non-members will side with members. The death toll goes up.
Add that Germany was actually already informally divided into two separate occupation zones, with occupiers that were at odds on many issues. If one of the two implements such a radical policy, I'd bet good money that the other doesn't, casting itself as the stern but human and understanding occupier vs. the bloodthirsty one. You'll have even worse population shifts than in OTL (and of course a concentration of former party members on one side). This will hasten the polarization of the confrontation between the Soviets and the Westerners. It is conceivable that the guerrilla in the area where the policy is implemented will be strongly supported from the area where it is not; at least sanctuary will be provided, but more likely armaments and training too.
In short, any 16-year-old boy would understand that this is a bad idea on purely practical grounds, and decide against it.
