2 bombers and 1 sub is a very mainstream G1 buy, so there’s nothing wrong with that purchase. It’s also reasonable to land a couple of German fighters in Rome; you have lots of fighters and at least a couple of them are usually able to land there. There’s also nothing too weird about attacking the British cruiser near Gibraltar with 1 or 2 German subs on G1 – it’s a legitimate target.
So really the only Herkules-specific part of your plan is to airblitz Malta on G2. That sounds like it could…sometimes be a good idea, depending on exactly what’s been happening in the Mediterranean. If Britain has a carrier group that survived anywhere near Rome, then you probably want to use all available aircraft to hit that carrier group; it’s just a more valuable and more fragile target. If Britain has an army in Alexandria or Tobruk, you might want to airblitz the army, instead. If you lost German fighters while scrambling to defend Taranto, then you may not have enough power to attack a heavily defended Malta – an AAA plus 3 fighters is a pretty hardened target, and you could lose badly if you attack with, e.g., 1 fighter and 4 strategic bombers.
All of that said, it’s reasonable for Germany to try to attack Britain and support Italy on the first two turns, and attacking Malta could sometimes be a good way to do that.
Personally, I think the obsession with conquering Egypt early is somewhat misplaced – Cairo should be the capstone of a successful Italian expansion, not the first step toward empire. If Italy (with modest German help) clears the Med and takes Marseilles, Greece, Yugoslavia, Bulgaria, Tunis, Syria, Iraq, and Gibraltar, then Italy can rake in 33 IPCs per turn – enough to match the UK Europe economy. At that point, then they can start pressuring Cairo. This will either force the UK to continuously spend its entire economy defending a fixed point (which is a win for the Axis because it deprives Moscow of support), or give up Egypt (and allow Italy to continue to expand, since Italy will now be outproducing the UK).
Of course, if the Americans come in hard against Italy, then you’re not going to see that kind of expansion – but you’re also not going to be able to hold Egypt for long, so it’s sort of a moot point.