Intermediate levels of command decrease the chance that Stalin/Hitler take command. I think Arnaud is the only one who has the actual formula for these probabilities.
It is possible to bypass Stalin/Hitler altogether by creating a cycle. For instance, subordinate AGS to AGC and AGC to AGS: Hitler no longer takes command in these two areas. However, this is very gamey and your opponent will probably resent it if you do it in PBEM.
Another advantage of an intermediate level of command is the following: let's say Rundstedt is in charge of AGS and he builds up a lot of OPs. Then he is supposed to give an OP bonus to subordinate HQs. Again, I can't give you the exact formula.
IMHO, it is either gamey or a waste of good leaders to create a hierarchy with more than 3 levels of command. I am in favour of banning Alt-H on HQs altogether

"Power always thinks it has a great soul and vast views beyond the comprehension of the weak" - John Adams