Ever since the article Anschluss by Richard Sharp it is common knowledge for Diplomacy players that Germany and Austria shall live and die together. For Italy the best first target is Austria, which means he will also face Germany most of the time.
In a recent game I played Italy. Getting Greece in 1901 was pure luck and neither Russia nor Turkey attacking Austria unfortunate. Anyways, Italy attacking Austria and succeeding is quite likely. In this article i will argue that it doesn't make sense for Germany to support Austria at some point. For example in this game Germany exposed himself to France by supporting Austria and was killed accordingly. Being Italy I asked Germany repeatedly to ally with me instead of Austria. This is how i came about the Anti-Anschluss theory.
If Italy succeeds in taking down Austria the next target has to be Turkey in most cases. Italy has to invest in his fleet so going for Germany or Russia is undesirable as long as Turkey still lives and also desires naval supremacy in the Mediterranean. Turning around and attacking France would take a lot of time and expose Italy to three countries (namely Germany, Russia and Turkey). At least one of them will go for Italy at some point. Therefore there is not much danger for Germany in switching sides away from a dying Austria and making peace with Italy.
Germany profits from a strong Italy in the long term, because Italy will concentrate on the Mediterranean. The steamroller alliance Russia and Turkey faces a strong opponent in the south instead of getting Austria by themselves. France has the time to attack England and needs to deploy some units later to defend against Italy.
A necessary precondition is a strong commitment of Italy against Austria possibly by opening Rom-Ven and Ven-Tyr without Austria suspecting anything. The early death of the Archduke is certain if Russia or Turkey also open anti-austrian. Given the benefits above Germany should not delay the austrian demise, but profit from it.
If the Germany player wants to try something different she could even arrange the Anti-Anschluss. Everybody but Austria should like the fact that Germany does not interfere in the Balkan. Especially Italy profits, because it has a strong impact from the start instead of playing just a supporting rule.