The RPM will drop with alt FB, but even if it doesn't show it's stated RPM, the performance of the craft is correct. We have added turbo to many to help with altitude performance and to give a way for engine type and carburettor type/performance for various types to be accounted for given there are no settings in CFS3 for things like that (with great help from Bletchley).
So the performance of the engine gives max alt, speed, climb etc corrected for craft/engine type and carburettor type/performance for various types. It may SOUND like it isn't due to the revs matching up with engine sound but the performance is usually correct where possible.
So it's not always black and white and you are getting the correct performance usually, DH5 excepted, this has been improved for the next patch.
Pfalz was similar to DIII in performance with much better dive - but in the field most pilots reports are they were much inferior in climb and turn due to becoming much worse quickly with weathering, and many were supplied with poor reconditioned engines etc. Make sure you have the latest patches installed as performance was improved.