I absolutely agree that being a survivor of a racial genocide is crucial to Magneto’s story. It ties perfectly into the racial allegory of the mutants’ ostracism from society. It’s too important to who Magneto is and why he does what he does.
But I’m not sure I agree that the genocide in question has to be the Holocaust. Sadly, the Holocaust was not the last time we’ve seen the horrors of genocide. There’s the Rwandan genocide, the Sudanese genocide… Magneto could be transplanted into one of those settings and they would serve the same purpose, and allow for a much younger Magneto. He’d just probably have to be black.
There is a third option — time travel shenanigans. And there are already rumors that the next Avengers movie could involve time travel.
Regarding a “philosophy of silence and separation,” I think hiding away in the shadows seems very out of character for Magneto. Magneto has always been about confrontation.
And as for Holocaust denial? No, that’s absurd. They would in no way be denying the existence of the Holocaust just by changing Magneto’s backstory to fit the timeline.
We’ve seen Captain America fighting in World War 2. Hydra worked hand in hand with the Nazis. The Holocaust is already an established fact in the MCU.