The general understanding of Edward VIII's abdication is that it came as a result of his desire to marry a divorcee, Wallis Simpson. This was seen as incompatible with remaining the monarch by the parliament and the Prime Minister of the day (Stanley Baldwin), and he subsequently chose to (was required to?) abdicate.
We also know however that Edward had significant Nazi sympathies (eg Edward & Wallis's visit to Berlin in 1937), and per sources discovered after the war ended (the 'Marburg Files') that he may have been engaged in a plot to return to the throne under a Nazi occupation of Britain.
My question is whether Edward's political views were well known to the British government and establishment by 1936; and whether these views were deemed acceptable or unacceptable for a/the monarch to hold by the British political establishment, with another war with Germany looming.
And so perhaps whether Baldwin or others used the Simpson episode as more of a pretext for removing him from office, rather than Simpson being the real reason that his remaining on the throne became untenable.
In other words - did the British fire their King because he was a Nazi sympathizer, and not just for wanting to marry a divorcee?
It was a small part of it, but in a much broader overall context of a general consensus among most insiders that he simply didn't have the character to be King.
I've discussed this before as a followup in the context of a much longer answer that when I have time I still need to finish up with a thorough explanation of the the post-abdication Churchill-King George VI relationship, but I'll expand a little bit on the relevant portion of it for this answer; the easiest to understand explanation is that there were really two layers of problems with Edward VIII.
The first was the public face, which was mostly that the King was gallivanting around and wanted to make a Queen of a twice married woman whose exes were still alive. This greatly offended what was still a fairly religious country. There's also some absolutely arrogant missteps like publicly spending gobs of money on his mistress in the midst of the Great Depression (there's an infamous trip to Wales where he expresses sympathy with unemployed miners and then what would be millions of dollars today in jewels get delivered) along with deciding that he and Wallis were unavailable for a public appearance in Scotland - and then showing up to the same city on the same day to go to a party. This is what the newspaper headlines blared out (at least the parts of the story that weren't censored), with the exception of the Beaverbrook papers that defended him.
The more private face was among the smaller circle in the government and aristocrats who knew him - including his father - and who had been convinced since the late 1920s that he had no business being King. That showed up in trampling over the unwritten Constitution by fighting the government on things like foreign visits early in his reign and having a lovely conversation in German with the German ambassador at a reception that held up the line (and taking him to another room for a further chat after.)
David, the future Edward VIII, had done some genuinely sketchy things both socially and politically even before he took the throne that was relatively common knowledge among the elite. Besides the woman-of-the-month affairs, often with a married target, what concerned them even more was how he was trying to subsidize Simpson with what were essentially public funds and property. One of the biggest was an attempt by him to transfer over a major Royal Estate to Simpson that only got thwarted by his father's death; he could do so as Prince of Wales, but couldn't without government approval as King. He also had a terrible habit of not really reading what was in the red secret boxes and on occasion even disclosing them indiscreetly; in short, his reputation as a sound administrator among insiders was terrible.
On the social side, there is a tremendous falling out between his family and Simpson, who acts as if she's Queen socially. Edward VIII's sister in law Elizabeth (the future Queen Mother) is one of many who is essentially treated as an interloper, despite having had fairly good relations for years with her brother in law. Even Queen Mary barely talks to her son after his accession; Simpson cuts off almost all friends and family that do not immediately acknowledge her view of what she feels her new social status is (the previous answer goes into a bit of detail on this), and Edward VIII fully supports her in this.
But the biggest issue Constitutionally is that Edward VIII's proposed solution to all these problems is to marry Simpson morgantically - that is, any children they'd have would be excluded from the line of succession. This is a terrible idea because doing so wouldn't just require the approval of His Majesty's British government, but also that of every other Dominion - most of whom flat out refuse when they're approached with the general concept. In other words, if he goes through with the marriage, there's a very good chance the British Empire is finished.
So I go into all this detail because it gives an idea of how Edward VIII's views on the political situation in Germany were a relatively minor component of what had become a chaotic whirlwind. The talk with the German ambassador was part of it - the Foreign Office was appalled - but it was really more a component of just how reckless Edward VIII was rather than concern about his political views.
It's also important to remember at that point that some sympathy with the Nazis was not all that uncommon at that point especially among the aristocracy. This was even more so during the year of the abdication, 1936, as the Nazis put on a slightly better public face to encourage tourism during the Olympics, with less obvious crackdowns among everyone they sought to terrorize and a temporarily less aggressive foreign policy. This succeeded to a degree and in fact plentiful members of the British upper class go to Germany that year, with a number coming back saying things weren't so bad and had been exaggerated in the press. In sum, at the time of his abdication Edward VIII wasn't all that far out of line with a significant part of the British public; it was only after the occupation of Czechoslovakia and the breach of the Munich agreement that appeasement became politically toxic, and while his views didn't change, that of the British government and people had done so.
So while after the abdication Edward Windsor did some truly sketchy things politically - radio broadcasts urging peace with Germany are among the least of the near treasonous acts he committed, and despite being his greatest advocate Churchill was eager to send him off to Bermuda to deliberately get him out of the limelight - it didn't play all that major a role in his actual abdication.
A followup question: What were the opinions of the immediate and extended royal family of Edward VIII's "life choices." I mean his post war existence seemed pretty pathetic, all things considered.
Are there any records of the Duchess of Windsor's opinions/feelings?