I agree in principle, but I don't know who that leader might be. Halifax is awkward; who else is there?
It also requires a "just-right" offer from Hitler. Otherwise there might just be a lot of dithering about terms before the whole thing collapses.
Halifax is the easy one. But there are other possibilities - not prominent ones in our time line, simply because Churchill soaked up almost all the oxygen, but with Churchill removed somehow then someone could arise. (Probably quite fast.)
I have to make it clear that I don't think that it's necessarily a likely path - but I also don't think it's impossible. We throw that term around too often in AH when what we mean is "unlikely" - or, sometimes, "I don't want to think about it".
Very few things are impossible. A lot of things are im
probable, but you're still "allowed" them in your AH so long as you either make it clear it was lucky or make it the PoD - or both.
And have people react properly.
If Britain surrenders, it's not going to be abject - it's going to be something like "France loses X, Belgium loses Y, no free Poland, Britain gives back German colonies and gives Somalia to Italy". A negotiated peace.
Restrictions on the Royal Navy are right out. Restrictions on the British
Army might be able to squeeze in,
especially if it's coupled with a hard limit on the Kriegsmarine (since that is basically mutually enforced inability for each nation to threaten one another).
That might actually be quite a relief for the British in the summer of 1940, with Sealion's possibility scaring the public.
After all, perceptions drive surrenders.
But what might be a really fun TL is if the negotiations
start... and drag on... and drag on... until when they collapse Britain has Spitfires coming out of her ears and the army's back together.
(Bit outside the thread scope, but it's a neat idea. Diplomacy as delaying tactic has a long history.)