Given that the story seems to think the right people to steer Amestris back onto a good path are equivalent to SS officers who personally carried out the genocide, at best it does seem to be pretty nonchalant about the whole military dictatorship and genocide thing. They even have the one alchemist who refused to participate in the genocide, but that's seen as cowardice in-universe and the show doesn't otherwise comment on it. In the end, the story actually vindicates the genocides, plural
because the souls of the genocide victims are what allows Von Hohenheim to banish Father in the end.
What's really stupid about imbuing something like genocide with magical elements in your fantasy setting is that it ignores the actual reasons something like that happens and also importantly the senselessness of it. Turning genocide into a spell component (for villains and heroes) robs any potential to say something meaningful about the subject. Worse, in the context of the rest of the story's treatment of the setting's politics, it cheapens the actions of the villains and furthers the apologism for their fantasy counterpart to fascism. That's not to say genocide in a fantasy setting doesn't work, but that making such a direct parallel to something from the real world (so direct that the original anime made it a literal parallel universe version of the nazis)
but rewrite the reasons and consequences to fit shonen fantasy the way that they did makes it hard not to see this as adjacent to holocaust revisionism.
At the very least it's framing the whole subject in bizarre way that's irresponsibly sympathetic to nazi-like figures, which is bad enough honestly. The nazis are historical figures at this point. The reason our understanding of them matters is because of what to learn about how to deal with similar people in the future, and this show is ridiculously tolerant of their behavior.