I wonder how it was perceived by the occupiers and if the collaboration regime tried to use it as a mean to appease or please them. Especially knowing the crucial link between Petain and the allied victory in WWI.
Great question! Fortunately it has been studied in depth by historian Rémi Dalisson in his book about the 11 November, so I'll just summarize the chapter he dedicated to the way Vichy struggled with the 11 November celebration.
Indeed, the Vichy regime found itself in a conundrum. Pétain was a hero of WW1 and celebrated as such. There was more than 3 million WW1 veterans still alive. Many of those vets were Pétain supporters and some far-right leagues, like La Roque's Croix-de-Feu, had started as veterans' associations. Until the Armistice of June 1940, much of the discourse surrounding the Armistice of November 1918 had had a strong anti-German bent: the war memorial in Rhetondes featured a granite block with the inscription "Here on the eleventh of November 1918 succumbed the criminal pride of the German empire vanquished by the free peoples which it tried to enslave."
Celebrations of the German defeat of 1918 were of course hardly acceptable for the Nazis. When the Armistice was signed on 22 June 1940 in Rethondes, the Germans covered the monument with a Nazi flag and later destroyed it.
The solution found by Vichy, and accepted by the occupying forces, was to authorize the celebration only it was discreet, possibly done in private, without parades, flag waving, Marseillaise singing, or other Republican displays of patriotism. Also, it was no longer a public holiday. German authorities insisted that the ceremony be kept as low-key as possible, otherwise it would be repressed "with the utmost force". This new way of celebrating 11 November was applied strictly in the Occupied Zone, and more liberally in the Free Zone (until 1942).
The ideology of the 11 November was rewritten by Vichy. It could no longer celebrate the victory of the French Republic over Germany. Instead, it was supposed to be a celebration of the dead of 1914-1918 and 1939-1940. A memo of the Conseil National (a consultative Vichy assembly) read:
Newspapers will have to avoid contrasting one Armistice with another, which is so close. Defeat is harder in the hearts than victory, but realistically it is less hard [than victory] because of the capital of glory amassed in 1918. [...] Even defeated, France inspires respect and its leader remains the victor of Verdun. It is in this sense that the sacrifice of the combatants of 14-18 and 19-40 was not [...] useless. The history of France is the history of our mourning and our joys. [...] We must rediscover the homeland in the cult of the dead because it is created from their ashes [...] This is the guiding idea of 11 November 1941.
The date of the ceremony was left to municipal authorities, and it was sometimes merged with the regular ceremonies of All Saints' Day on 1 November. It was now centered on Death - with a bit a religion -, with Pétain as the savior linking WW1 (the hero of Verdun) and WW2 (the leader of the new regenerated France). The ceremony still existed, and WW1 vets participated in it, but it had turned into something else: a day of mourning and expiation (the dead of 1939-1940 were victims of the weakness and degeneracy of the French Republic), not one of victory, and all references to Germany were erased.
Still, changing the meaning of the 11 November was not easy. The 11 November had not only celebrated the end of WW1, but also the revenge for the 1870 Franco-Prussian war and the return of Alsace-Lorraine to France. Like the 14 July, it was a patriotic and civic ceremony, and a thoroughly Republican one. It celebrated Republican values, Republican strength, and Republican spirit, going back to the armies of the Revolution, as well as the French resistance to German aggression: not yet the Resistance but the symbolism was unmistakable, no matter how low-key the celebration had become. And indeed, the 11 November gave resisters plenty of opportunities to oppose the Nazis and the Vichy collaborationists on the symbolic ground. From 1940 to 1943, official 11 November ceremonies were regularly disrupted: people sang the Marseillaise or Le chant du départ, waved French flags, put tricolor ribbons and flowers on Republican monuments, distributed anti-German tracts, went on strike, and even paraded in the streets. On 11 November 1943, 200 resistance fighters marched in the streets of Oyonnax and organized their own Republican ceremony: laying a wreath on the war memorial, observing a one-minute silence, singing patriotic songs. Similar disruptions happened in other French towns, and the Vichyite paramilitary organizations, the Milice and Service d’Ordre Légionnaire, had to do counter-protesting of their own. The French underground newspaper Combat wrote in November 1941:
11 November, victory day. It symbolises France. That is why the enemy strikes it from our calendars.
In 1942 and 1943, 20% of the 11 November ceremonies resulted in such incidents, and one could say that the Resistance turned the Vichyite tarnished version of the 11 November into a Resistance ceremony.
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