With Habsburgs settled on thrones from the Rhine to the Balkans, and a Germany that is not ruled over by militaristic Prussians (probably means Napoleon III probably stays in power if there is no Bismarck in charge), there's a possibility that WWI is averted. Catholicism does play a bigger role than in OTL even if only in a protocol/ritual sense, and there is no Kulturkampf (although this would also mean the Emperor will be expected to be an even bigger protector of the Pope and Catholic rights when Italy takes Rome and the Papacy considers fleeing).
Errr...it was Austria that pratically started WW1. They asked for german guarantee because they didn't have enough power to fight Russia alone. If ITTL the austrians control an uber Germany, what prevents them from declaring war in the same way they did OTL?