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The thing is that, as mentioned above, the Megali conference requires actual effort to fail, and sabotaging your own search for allies makes no sense whatsoever. Moreover, there is a whole focus branch dedicated to fascism, which doesn't allow forming Byzantium.
So as it is, to form Byzantium you need to be fascist, but instead of following the fascist tree you have to follow the democratic tree, sabotage the Megali conference and then switch to fascism. It's frankly just silly.
Except that's not the choice. The choice is to take democracy or autocracy, at which point you have to choose democracy and then later backtrack and choose autocracy.
The Fascism that follows Monarchism is an internationalist Fascism that ends up Pro-Axis. They stem from the choices the Monarch makes to keep power and so are in his route.
The Fascism that follows the Republican path is a separate Fascism, a separate party in fact with separate goals. This stems solely from the first action of Venizelos' party, stirring emotion around Anatolia. This directly leads to the Anatolian Greeks forming a Fascist party but they would still end up being nothing, a party to be either suborned or crushed if it wasn't for a choice that the Party in charge can make to invite them into government.
The reason it's under the "Democratic" path rather than the Monarchist Path is that it comes about as a direct action that they take only in that route. The Greek Nazi's were against the Megali Idea and Pro-Hitler, it could not come about without stirring Anatolian sentiment, which is also something the Monarch was against.
Venizelos, on the other hand, was Pro-Megali and so he would stir the sentiment.
Or in short, it is where it is because it's the only place it could be.