I loaded a bunch of saved games after the 37mm's got "Steep Angle" results, hoping that would solve the issue.
The Warhawk is stuck in the air after its strafing run.

The Germans in this screenshot are all dead/wounded, but standing upright.

The two 37mm AT guns and the Panzer IIIL have been staring at each-other for 40 minutes or so as everybody seems to get Steep Angle results. I tried firing at the ground next to the tank, but the gunners became "suppressed" when I did that. The Panzer IIIL then proceeded to fire diagonally at the sky with its bow MG.

An overview of the situation for most of the battle. The German assault on Meftah failed, but if I move towards the German deployment zone north of there, my men get fired at by some big AT guns and a Panzer IVF1.
There's a half-track on an overwatch position and a German MG team in the central orchard, preventing movement there. My men holding The Farm are hiding in a fake wall. Some walls are solid, some are not. The collision model is pretty poorly coded, as noted earlier.
The Germans have not moved in a while, but I can't safely move either due to the Germans holding overwatch positions.

The result. My two "wounded" men were the squad leader and a rifleman of a BAR team who Routed and fled the map after taking fire from something big. For some reason, the Germans didn't open fire on the routed men.
The Germans seem to have reclaimed their two broken down armoured cars and/or the SdKfz 251 that I knocked out at Meftah as they are "wounded".
My three mortar teams helped a lot at Meftah, otherwise the casualties wouldn't have been this one-sided. On the other hand, the Germans only assaulted it with a Zug Führer unit and a single squad, aside from the 2 armoured cars (one knocked out by mortar fire, the other with grenades by the Rifle team) and half-track.
The German AT gun was knocked out by a 105mm howitzer barrage.

I'm guessing the battle simply became too glitched at the end for the AI to handle, which led to it staying in position.
As noted in a review of CCTBF, the Panzer IVF1 remained in positions whilst the Panzer IIIL drove straight for the Observation Post objective.