One of the great things about this game is that even the Axis strategies that are optimal have costs. If the Axis focus on X they also create vulnerability Y that the Allies can exploit. This goes both ways of course, but the Axis start with the initiative and so the Allies are more often in the position of reacting in the early game. The DOWs illustrate this well. A later Japanese DOW should generally improve the Axis chances in Europe but at the expense of Axis chances in the Pacific.
My skepticism of this approach is that I don’t think it accounts for how the allies might change up their approach in response. If the allies just go with the default and build infantry and retreat, this strategy will work better, but I think they may be able to break it if they change up too. Obviously without trying it this is a bit speculative but here would be some concerns.
So far I have liked a J3 DOW, but it is a signal to the allies that you are trying to win on the Europe map and gives the US more leeway to build in the Atlantic. It also may mean the other pacific allies can more safely put energy into the Mid East and Russia while still securing their own positions in the Pacific.
A G1 Romania factory tells the Soviets that you are focusing on them but it also usually means that they can block a G2 attack. They just build tanks in their forward factories and stack in Belarus and W Ukraine. A G2 navy build threatens the Caucasus but the lack of land units means that a G3 direct attack on Eastern Europe is also blocked. And if you go for the Caucasus you would have a hard time both attacking the USSR and defending your starting territories in the 3rd turn. If the USSR is primarily thinking of your G5 or G6 attack on Moscow and only building inf, than they will have trouble countering. But in seeing that you are not building land units, the Soviets might switch to tanks, mechs and artillery knowing that you will have trouble defending against the counterattack and that territories in E Europe and scandinavia might be up for grabs.
As Kaleun points out, it also lets the Allies know that sea lion is less likely which allows the UK to build more aggressively.
Both sides should certainly consider attacking Neutrals but it is much more risky for the Axis since there are many more Neutrals that the Allies can easily reach. And an I2 attack on Turkey has lots of dangers. If it doesn’t ensure an early axis victory you have given the US income, plus lots of inf (16 between Spain, Portugal and Latin America), and a more direct route into Europe. This could easily mean a secure Allied beachhead in Spain on their turn 3. And as KaLeun notes, it also strengthens the UK in Africa and the Mid East. The UK Pacific also gets 4 more inf and a direct route for its air to Moscow (and vice versa). If you decide to also attack the other Neutrals for their income you are also committing land units that are badly needed against the USSR.
Anyway, just some thoughts. The best Axis strategies (I think) are ones that are more open ended and which allow the Axis player several options depending on how the Allies counter. The allies are put in a position of having to prepare for several possibilities and have to play more cautiously as a result. This strategy really commits the Axis to a particular approach and seems to make it harder to adapt to changes in the Allied response.