It’s a good strategy. The main benefit is it prevents the Allies from landing Algeria on Turn 1-2. Another thing to like about it is you’re credibly harassing the Allies without losing any IPCs on naval units.
I’d probably attack the fleet with the RAF and probably also with the BS and trannies (which I’ll retreat to 8). If Germany submerges, I take a shot with the American bomber. So odds are there’s only 1-3 subs left over to go to the Med. Meanwhile the combined fleet is in 8 (UK buys an AC and a fighter), and I put my Russian sub in 12.
At that point, if Germany moves to the Med I can go to Norway with the combined fleet, while the United States builds up air power to knock out the Med fleet. If the Med fleet moves to Egypt or the Black sea I can land Algeria, which signals the beginning of the end for the Med fleet unless Germany invests in an AC.
Possibly the better move for Germany if 2-3 subs survive in SZ7 is to attack the combined fleet in sz 8 with 5 figs, 2 bombs, and 2-3 subs. However, this is a good battle for the Allies unless Germany has 3 subs. Nonetheless if Germany has 2 subs it might still be Germany’s best option to attack and hope for good dice.
I think this opening has enormous chances of success against non-experts. Against experts I’d prefer to go to Egypt strong and get 5 infantry instead of a bomber.