ORIGINAL: WanderingHead
Personally, I like the idea a lot. I see play variability (maybe 50% of games have Finland, 50% don't) and a pretty good and simple mechanic for having Finland as a staging area, at least threatening Karelia which is perfectly historical, yet keep the Fins offensive potential down in keeping with their lack of overall enthusiasm (refusal to attack Leningrad, for example).
Sorry to raise an additional point, but here it is. The Germans can do a lot more than threaten Karelia; under your final implementation the German player can readily send a dozen German units to Finland if they have transports to ship them; allowing them to decisively flank/isolate Leningrad. Later in the game it would allow a similar force to hover above Russia's northern flank, secure in a Finnish fortress.
This should be problematic for two reasons; (1) the Finns weren't likely to allow a German army larger than their own into their country, and (2) the terrain/infrastructure simply wouldn’t allow army group-size formations to maneuver and fight; it’s mostly trackless, old-growth forests.
Earlier I had included a +40% event modifier for each German unit in Finland ... so that if the Germans had 3 units in the country then they faced a 20% chance of a Finnish armistice. I realize this would also create the requirement to code a "retreat" of German units out of the country if the armistice event triggers, but it would nicely round out a fairly realistic implementation of Finland's participation in WWII.
If your still averse to that option (or even if you like it), then another option to put the brakes on free-wheeling major offensives in/out of Scandinavia would be 2MP land borders. I’ve played way to many games in which major ground campaigns raged back and forth across Norway, Sweden and Finland as if they were the Russian steppes. If 2MP borders were placed between Norway/Sweden, Norway/Finland, Sweden/Finland, Finland/Karelia … it would go some distance toward limiting that kind of nonsense.