I haven’t played with those rules, but I notice no one is providing for you, so I can try to make a contribution.
I have read the rules and to my eye it seems obviously the case that instead of having a few territories and units here and there that are French, they become pro-Axis. Especially the two ships in sz 93 makes life a lot easier for Italy in their first round. And those pesky infantries in Africa and Syria staying put and becoming easily converted to Axis is another advantage. It also makes an African campaign a little more interesting for the Germans, getting to bolster their transported force with infantry here and there.
A negative is of course that S France can’t be converted to Axis without the Vichy rule being reverted, losing that income of 3 IPC.
For the Allies, it gives them opportunity to actually get income from French territories that now have become pro-Axis.