PPSH cons are also not elite. Not by game logic standards (they're not flagged as elite)
No unit is flagged as 'elite' in CoH2. It is not a thing in the game.
What does (now) exist are different versions of certain slot_items, specifically the PTRS that have different values depending on which squad is holding it. This is a very recent addition and the only thing that could delineate a squad as 'elite' because one might decide to call the Guard version of PTRS the 'elite' version.
Calling a unit in this game 'elite' is at best subjective rating, and not a real game mechanic. As such, the argument that one squad should or should win in a fight with another squad because of their subjective 'eliteness' is more or less meaningless.
There are a lot of factors that go into a player having a conscript squad, with PPSh, and getting it to vet 3. Likewise there are a whole lot of components that get you to having a vet 5 Obersoldaten holding an LM34. When you start to take into account those kinds of factors, and the kinds of roles these units tend to have on the field, you should start to realize that pure combat performance is not actually a great metric of balance.
Also the tooltips ingame have, like, never been accurate.