I guess I'm not sure (a) why you are seeing this as such a huge issue or (b) why you think a lack of recon should trigger systemic over-estimation. You are not showing instances where an attack is made on a unit that wasn't detected till the encounter happened, never mind if that unit was still at the weakest level of detection. That is where I'd expect errors of over and under-estimation, not when the issue is that there are gaps in your knowledge
In response to a)
On reflection I don't think it's a huge issue actually. But an issue nonetheless. I've come to realise that my experience only applies to when front lines have settled down, and only to the Sov winter offensive, when lines are fairly static.
As you point out, the equation changes and recon variable increase when mobile warfare develops, lines are fluid and you bump into units during your turn. You also demonstrate in your example how in mobile circumstances it's possible that your recon will overestimate enemy strength, and the gap between estimated CV and true CV can be much higher than the band I've observed. This is all good and as it should be.
But what it leaves us with - and we all have to ask ourselves if that in terms of FOW realism whether we feel this is correct - is that once front lines settle down, your recon will never overestimate enemy CV.
And that as per my examples (and the 100s of others I've been observing), you may as well put in the rule book the fact that you can relatively safely assume that any enemy unit which started the turn in contact with one of yours will have a true CV of somewhere between display CV, and display CV +50%, with a very strong tendency towards the mean.
If we feel that this relatively narrow band of doubt adequately reflects reality of FOW (under circumstances of 'settled lines') then all is good. I guess I don't have a huge problem with this, perhaps this kind of bandwidth is correct.
But in response to your b) I am not and have not been suggesting the game gives you SYSTEMATIC over estimation of enemy strength, rather that it give you OCCASSIONAL over estimation of enemy strength. Again, this is caveated by me now talking specifically about circumstances in which stable lines have formed (which let's not forget is the majority of game time, over the campaign).
I have to say for me it still feels like IRL commanders would be getting reports of enemy formations that overestimated their strength perhaps as often as the reverse, even when steady lines have formed. If I'm a division commander, it suits my purposes to err on the side of over-estimating the strength of the formations facing me to my boss so that he sends me more resources. And I also know as a division commander that the worst sin is complacency and assuming the enemy is weak when he is strong.
So in sum:
1 Are we happy with the +30% mean 'display CV vs true CV' during static warfare? This may as well as go in the rulebook to help new players if so.
2 Are we happy that once front lines form, your recon will never again overestimate enemy CV?
My feeling is that if you change 2 to include overestimations, then 1 is fine.
And as I say, this is all caveated to being observed solely during Sov winter offensive of 41 (and the beginning of the Vistula scenario from the Sov side). So my data set is imperfect.