Greetings, I missed this UK approach in the Allied Playbook (and only played it myself several years ago when I was the UK for 2-3 battles, as we only have 2 games a year) and do not see it in discussions or battle reports.
The basic philosophy behind this UK strategy to handle Italy is to ‘box it in’.
Instead of big decisive battles such as Taranto, where you both lose the Italian and UK fleet because the Axis can scramble their planes, you surround SZ95 + 97 while you bring as much UK fleet and airforce to the Med to be able to counter-attack. As soon as Italy attacks one of the ‘boxed’ sea zones, it get’s out of scramble range, and can be easily destroyed by the UK counter-attack.
You do this by always placing an allied ship in either:
SZ93 (French fleet)
SZ94 (UK cruiser)
SZ96 (UK carrier)
SZ99 (UK destroyer)
This makes the Italian transports useless, as they can never attack either Gibraltar or Egypt in one turn, so this gives you time to counter-attack. Bring your UK forces (fleet + airplanes) to the Med as soon as possible. Italy’s income too small to reinforce their fleet while unable to expand, while the UK can quickly muster even more overpowering forces.
Boxing the Italians is combined with Tobruk, as described in the playbook. You want to clear Africa as soon as possible to start being on the offensive. Ideally you clear Tobruk UK1, then Ethiopia (or wherever they moved to) in UK2.
What often happens, is that Italy is so happy to still have it’s fleet, it does not directly try to get out of ‘the box’ and unites it fleet with the illusion it can protect it. You still kill the Italian fleet in UK2, 3 or 4, but with much more overwhelming forces and Africa + the Med in firm control.
I believe this to be the strongest option of all UK options.
UK can reinforce the med with:
4 fighters, 1 tactical, 1 bomber, 3 destroyers
That can counter-attack in UK2.
It can further send a:
cruiser, destroyer and fighter to counter-attack in UK3
With JDOW1 this becomes even more easy with USA support.
I combine it with a transport in South Africa UK1, and possibly a minor factory in Egypt either UK1 or UK2 based on what Germany did (we consider Sea Lion very sub-optimal but the tradional 6 infantry + fighter remains a standard opening). Persia is also taken in UK1.
I think I conquered Rome with UK early in those games, as you have overwhelming fleet, airforce and troops with 5 transports in the Med in your UK2/3.