All of the above points made are definitely great points to consider. Recently, an author - Elin Hilderbrand - came under fire for mentioning Anne Frank in one of her books in a casual way with a joke made about hiding in an attic all summer. I didn't read the book, but a lot of the backlash was about how the joke was in poor taste.
Hilderbrand has said she has nothing but respect for Anne Frank's story, but that doesn't mean using it for her own benefit (and in an indelicate way) hasn't caused a lot of upset. There are some topics that are so emotional and so traumatic, it is really hard to rewrite them in a fantasy retelling or even alternative history retelling - despite the good intentions. Even if it is meant to be fiction, there is a lot of stigma around writing about a historical event when you yourself don't have a personal connection or personal experience with (although, I don't know if you do or don't), because if anyone who has that connection or experience reads it, they could take offense to the severity, trauma, or experience being misrepresented in any way.
I've been seeing a lot of this coming out through LGBTQ+ characters being misrepresented by writers who don't have a personal understanding of what that's like, along with racial minorities - not only with the challenges they face but also with the mass stereotypes that surround them. So, it is definitely a delicate area to tread in, and I would say would require extensive research into the Holocaust from multiple perspectives if you were even going to attempt it.
Personally, I like the idea of writing a story with a character based on Anne Frank - maybe with some of the same events in their life - who is experiencing something similar to the Holocaust in their own time/world and how they survive and change their own world.