What happens at this green circle in the U-Boat path between North Africa and Eastern Med? I can't find any instructions in the rules or on the map.
It's just a placeholder for the DRM marker obtained via Card 22 ("Air Assault on Crete").
However, I do see your point that the U-boats dotted path shouldn't travel through that circle, but the map is a bit jam-packed and that's the way it turned out. It has no effect on the U-boats whatsoever.