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First, is internally autonomous with little oversight from Baku. Palestinians strongly desire one state, not two within one confederation. Second, it is corrupt. The Nakhchivan leader Vasif Talibov has held power since 1995. While he has developed the region, Freedom House describes it as being run as if it were his "own personal fiefdom". Having Gaza remain Hamas' own personal fiefdom with little civil rights is a recipe either for secession, an Arab Spring, or yet even more Hamas-Israel Wars. Thirdly, most Nakhchivans prefer to travel and work in Turkey rather than Azerbaijan-proper. This weakens a state and not a positive model for Palestine to follow.
Most importantly, good portions of Azerbaijan and tidbits of Armenia are occupied by each other.
The blue is internationally recognized Azerbaijan but in reality part of the self-proclaimed and Armenian-defended Nagorno-Karabakh Republic. This de facto republic came into being because of Armenians being divided from the Republic of Armenia by a hostile Azerbaijan.
Notice the one little circle of Armenia in Azerbaijan and the three dots of Azerbaijan in Armenia. Currently all these are occupied by the opposing hostile power. The conflict between Azerbaijan and Armenia is frozen in place with Azerbaijan planning/dreaming on how to recapture the land lost to the Nagorno-Karabakh without dragging Armenia's allies of Iran and Russia into war. A functioning Palestine needs to be at peace with Israel. Too many warlike variables will only drag the Middle East back into war and cause even more conflict causing geopolitical shifts.
Nakhchivan, Azerbaijan, and Armenia provide an example of failure. Once again I assess that, while geography is not destiny, declaring a "united" Palestine based on pre-1967 borders sets up Palestine for both internal and external failure.