Fixing the potato problem for Germany Austria and Luxembourg is a question that paradox interactive has failed to solve up to now. So especially if yo use steam , there is one basic solution to the "potato problem". This will also solve the missing smgs on German units that is a parallel bug to this patch.
Simply go to windows explorer , click program ( x86 if you're on a 64 bit computer) , then steam , then steamapps, common , hearts of iron 3, and finally locate a folder called interface.
Now look for a file called "ger_XPRostInfantryXXL_avatars.gfx" rename it to "ger_XPRostInfantryXXL_avatars.gfx.bak" and exit windows explorer.
Now launch HOI3 from steam and you should be all set!
This file will deviate if you bought the non-steam copy so it will be located in /games/paradoxinteractive/heartsofiron3.