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This looks like a bug to me. The Italian AOI territorial is an Italian minor country unit. Thus it can not co-operate with Germany, and may not stack with German units, and may not take part in the same combat.

Cut from RAC: 22.4.5 Territorials
....
Italy can only build the Italian AOI territorial if it controls Ethiopia, Italian Somaliland, or Eritrea . It can
arrive as a reinforcement in any of these countries. [Clarification. Only Italy may build the AOI and its home
country is is any and all of Ethiopia, Italian Somaliland, and Eritrea - Jan. 16, 2008.]

I concur.

Here is the only other mention in RAW

AfA option 10: The Italian AOI territorial can co-operate with all
other Italian territorials (see 22.4.5).