Well let's hope the 'big house' older brother, at least, gets his comeuppance at some point. The younger one is rather weak but essentially not a bad person, is he?
You are probably right that Joe didn't 'twig' that the baby is his. I'm pretty sure that at some point, further down the line, Caro's baby is going to resurface, unbeknownst to the Middletons and the 'big house' family.
I think maybe the baby was given away because Caro didn't seem to be bonding with her, rather than necessarily because of the stigma associated with the illegitimacy of the birth. As you've pointed out, upthread, if it was to do with the stigma, you would have expected them to have given the baby away at birth....
Yes, I guess the Authorities would have had to make an example of upstanding members of the community (as teachers would have been) not doing their duty. Leading by example and all that.... Still, I thought I was quite au fait with WW1 History and it shocked me that someone could be denied conscientious objector status and be court-marshalled and executed for defying call-up without so much as leaving Britain....