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I've taken over the US as fascist Mexico, conquered Scandinavia as Sweden, Eaten the UK as great communist mother... America.
It provides a fair bit of ahistorical possibilities.
https://www.youtube.com/watch?v=VyCL1LIESR8
Benjamin Magnus played Germany as fascist, but the AI really throws him some curves. So this game doen't follow history, even if you try to yourself. It may go in any number of directions. So watch some or all the videos of this series and see for yourself if this is a game you would like to own.
And that was all in the same game.
Historical? Don't make me laugh.
What you are asking is personal to every player ofc. and its hard to remain just objective on what is great about it, once you found your enjoyment. but ill give a bash at it.
For me, just like you the minor nation's give me a bigger 'attraction' then the majors, I have played with major, but quickly got bored of them due to the nature of what is WW2(land grab, produce, repeat).
I would love to say that this game is indeed 100% historical...but if i would do that i would defently be a lair.
Point being, that you(player) control a country, you are not its leader, nor it's generals,...just think of yourself as god or something, i don't know.
You take command of everything, and you decide everything.
So indeed you can make Nazi Germany, Democratic..it will take some time tho...a civil war might erupt from it,...but it is doable.
You can also make the USA Comunist, or Facist.
In that way the game is already Ahistorical.
As to the game play itself, again, i wish i could...but i can't...Sometimes the game plays pretty much like WW2, The next time WW2 might never fully come, because UK invades Germany as soon as they declare war on Poland, taking them over around 1940, and creates a puppet/democratic Germany.
The next game, Germany might just play as history dictates(poland -> low countries -> france -> balkan -> russia), with the exception that it might actually succeed in operation barbarosaa, and force the USSR into submission.
Now there is a little Tick box that people often confuse with a "Historical mode" i don't know how people got to it(EG if a Dev mis-spoke, or people mis-read/mis-named it) and it just got stuck in it.
But the Game does not have a historical mode. The mode it does have is, 'Historical Focus'. and all this does, is force the AI to make choices for its National Focus tree on historical acurate items, thus increasing the chances that you get a historical game...but last time i checked history books, Greece did not join the Axis, Spain remained out of the war. And Japan did not beat the USA.(could be wrong tho,..might need to read more books
So in no way is there 100% guarantee that you will get a historical game play.
I know Paradox loves to promote it(as it was more the case in HoI2 and HoI3), but in HoI4 at this stage, there is no certainty, other then you are more likely to get a different game, everytime you play. then to have a historical acurate game.
Now because it is a game from Paradox aimed at WW2 range and era, there are ofc. the un-avoidable historical accurate events and Focuses in the Focus Tree(Anslauch, Molentrop-ribben pact, Pearl Harbor, Marco Polo Bridge incident, etc). BUT there is no guarantee that these events will actually happen.
Looking at the USA here for a moment, you 'research' a focus called 'taking a gamble' which could lead into the pearl harbor event, but only if japan has the right requirements for it. If japan does not meet the requirements(to few CV's, not enough manpower, War in China takes to long, A fly distracted the AI, For some reason it sends 200 divisions to Germany while losing the war in China, etc). then you will not see the Pearl harbor event ever happening, even tho you did everything right, the AI decided to do something else.
and these factors are complete random. As the AI is programmed to take certain focuses from the tree. That is scripted and the AI will do so, But the Ai does not get scripted in naval warfare, nor in manpower deployment. and can behave like a cannonball in a glass shop, or it can play out perfectly. If say for what ever reason Japan gets into a early war with USSR, and the USSR manages to sink 2/3 of japan's CV's then no pearl harbor event for the USA.(and there are many more examples, of how a focus is historical, but does not always plays out to be historical).
Now as said i find more joy in playing a minor, because it makes the game harder, think of: less factories, less manpower, less research you can do at the same time, less resources. Yet it is fully posible to make a deciding inpact on WW2 with your minor nation(made Peru the boss of North and South America for instance, Created a Siam that absorbed the Whole of China and parts of India). the challange in doing such things is much greater then say, play as Germany and try to survive WW2(especially when you find a good division template and set up for productions etc).
To sum up i can only say, i enjoy because of its randomness(it's a relieve after playing HoI1,2&3 where there is more focus and force on re-creating WW2).
Now there are defently things historically acurate, like the major Tech trees, and the Equipment they unlock, which all have a base/foundation in History(all be it that, some never really where created like the E-50, Maus for example). this historically acuracy on models and tech names certainly helps to create a good atmosphere to play the game(for me at least). but it unfortunally something that is still lacking for the minor nations(as been the case in every HoI game). But that is where another good thing(again personally) comes in, Mods The game has a great realm of opertunity to be modded in, and HoI4 makes no exception in that. it even expanded more then in the previous games, to where i would almost say;
'If you can Script it, You can make it happen'.
Mods, give a great replay value, because every little mod can do something else, and i'm sure that between the 1000's of mods on steam, and many 100's more on paradox forums(if not more at this stage) will give you a great time, no matter if you are looking for a serious mod, to replay WW2, or to have mega cheat mod so you can conquere the world by 1937, to the silly mods, like a radio-active mutant dog race(Dev idea, that they are using for their mod stream).
The game is basicly a big old sandbox, with a scripted AI that is forced to make choices historically corect, but can just decide to another thing(other example is that Poland accepts the Danzin or War choice, gives Germany Danzig, and WW2 never happens).
I must say tho that from time to time the AI does go a bit to far overboard in its wierdness(Poland not joining allies, but forming its own alliance and taking over Russia for instance).Or where the AI is just totally retarded(sending 100's of divisions onto a death march).
But in overall, i enjoy the game due to its randomness, the option that it can act like a historically acurate game, but does not have to(even if you set Historical Focus mode on).
And this is what you experianced in your game as well(unless your friend used a mod).
In South America, in a vanilla game, all countries have a Guarentee of protection by the USA. so if you got to war in South America, You pull the USA on your head(who really are a slow giant waking up due to all the negative buffs it has at the start of the game).
I played Stellaris as well, which was quite enjoyable, but HoI alway attracted me more.
Again, for me, great replay value due to everything mentioned above, The game has some problems with the AI being just flat out retarted.
But so far, not a turn of, of the game for me.
The only game I've played virtually every day since release. Ever. Plenty of very good mods, too. Oh, I also have Stallaris but hav't played it since HOI4.
Good luck.
Bazz