Finland emerged as a more or less democratic country and retained most of its sovereignity.
Yes. And they could easily have done this without the Continuation War. The Continuation War ended with Finland in a much weaker position than before, with a severly weakened army several hundred thousands of men dead, and large segments of the country destroyed.
It achieved ultimately nothing, save putting Finland in exactly the same situation it already was in: With an army beaten by the Soviets and forced to accept Soviet demands.
So option A: the Germans invade the Red Army liberates Finland is worse than IRL
Germany invading Finland was never much on the table, and they had to fight the troops the germans could spare for Finland anyway. (even conducting the war would be something of a logistical nightmare, of which the germans admittedly had several) they'd have to go either across the Finnmark (which would be a nightmare) or across the Baltic (with what navy did they have left by 41?)
The options set forth to Finland was not "get occupied by the germans or get occupied by the soviets" it was "stay out of the war or join it." They chose to join, fair enough, they chose to won the losing side, that is just a mistake. (protip: if you join a war, do it on the winning side)
Now, again, from the horizon of Finland in 1940 joining the war made a certain amount of sense (join the winning genocidaires, hope for some scrapts at the victor's table), it's just that in hindsight the made the wrong call. The Continuation War was a massive mistake that the finnish government only managed to clamper out of by the skin of their teeth, and cost hundreds of thousands (upwards of a million on all sides) lives.
If they stay out of the war, they have another hundred thousand soldiers in 1945, where the Soviets are still exhausted from the war, a still extant airforce, and generally better strategic position.
Not all of the population was rounded up to the camps -
Oh yes, "not everyone was put into camps with horrible living conditions". Much better.
Those camps were not there to destroy people
The camps where set up to prepare for the ethnic cleansing of Karelia after a potential peace deal.
Given what had taken place both in Karelia as well as in the Baltic states in the Soviet occupation & purges it was the Soviet Union which came across as genocidal thanks to the actions carried out by the USSR.
Except that the finnish government, like every government, was well aware of what the germans were doing.
Soviet had after the Winter War made it clear that they were not satisfied with the result of that war, would not allow Finland to stay neutral, and wanted to subjugate the whole country. The meetings between the Nazis and the Soviets where the Soviets demand that all Germans forces need clear out of Finland in order to give Soviet troops free hands in there make this part abundantly clear since these talks took place after the Winter War. The war we have been primarily discussing - and events like the Weapons Cache Case - convinced them otherwise. Don't get me wrong though - the absolutely best outcome would have been had the Soviets just abandoned their imperialistic fantasies and opted not to invade Finland in the first place in 1939. All the following events between Finland and USSR in the WW II are directly related to that Soviet decision.
Soviets demand that the german troops that would later assist in the invasion of their country clear out? Shocking! The Soviets likely had designs on Finland, but in the period 1941-1945 they were a *tiny* bit busy. And they would in any case at worst have ended up in the same situation: IE. trying to fight enough that they could get away with not being swallowed whole.
Only instead they allied with the nazis (any claim to the opposite is a fiction, and everyone involved knew it, there were german troops in Finland, the germans and finns operated joint taskforces on the lakes, and so forth) started a war they lost, aided the nazi genocide, and generally did nothing at all that made their situation better compared to... Not doing anything.
Like, i could see why someone in 1940 would think joining the war would be a good idea (idiots tried the same in most countries) I cannot see people seirously in 2018 arguing that joining a war alongside the nazis, who, apart from being y'know,
nazis, were also the
losers of the war, was a good idea.
I mean, even in the worst case scenario, the Soviets DO invade, the situation still isn't any worse than it was in '44-'45 historically.