I didn't find the division in Berlin. I think I lost it permanentlyI'm part way through Part 10 where you're having a few problems in Norway. There's only one thing I can think of that could have happened to the division defending Narvik, which is that the unit 'shattered'. I think this is only supposed to happen with low strength and/or low org. units and only when you have a low officer ratio. Since the victorious British division still had high strength, so should yours. Your officer ratio is fine, so it must have been when the organisation was exhausted. I wonder if being overseas has any relevance here? If the unit did shatter, you should find it re-forming in Berlin.
Lastly, you've confirmed that heavily used air wings can be destroyed. I'm glad I now know the answer to that question!
I am trying to optimize my air deployments. I'm checking in on the air combat screens and try to find out why sometimes I'm completely overwhelmed. I'm setting most of my missions to day time and I'm reducing the air fleets from 4 to 3 squadrons to reduce the stacking penalty. Another point I noticed is overlapping areas of operation. Squadrons will gang up on the enemy and the stacking penalty is back. I think I'm seeing some slight improvements. Another issue is that I have some very reduced squadrons deployed, usually between 80% and 30%. I'm prioritizing their reinforcement.