I think everything checks out fine, except -
Italy must leave 1 Transport in 97 in order to be able to take Gibraltar on I2.
This prevents UK from wasting the German fleet as it sits in 111 after G3.
I don’t think UK would act any differently on UK2 because of thsi change.
So-
I would recommend that Italy not take Cyprus, but put 1 BB, 1 CA in SZ 99.
There, Italy only has 1 Fig, 1 Tac to fear. This is a losing proposition for UK.
Leave 1 DD in SZ 95.
And leave 1 CA, 1 TT in 97.
Again, only 1 Fig, 1 Tac can fight this, and Italy can scramble here just in case.
Or-
Italy could forgo the Fighter purchase, and get 1 TT, and maybe 1 Inf if wanted.
This is a tough choice because the Italian air force is very helpful in the area around UK for Sealion.
On I2 Italy will have 16-19 IPCs to spend on air power. Then Italy can have either 3 Fig, 1 Tac or 2 Fig, 2 Tac to help Germany, and still be able to take Gibraltar.
Thoughts?