- Would this jeopardize my visa?
As far as I understood you, he is with you and has a residence permit (which nowadays automatically includes a working permit, it should say so). No, I don't see why this would in any way interfere with your Visa, it's completely legal.
- Would this compromise the US employer's compliance with any regulations, tax or otherwise?
Not any German regulations. For US regulations, it doesn't compromise it's compliance with government regulations, but many large corporations have in-house compliance standards your employment profile might not work with. See the next point.
- If it is in fact allowed, does my husband pay German universal tax or are his W2 wages exempt under the US German tax treaty?
If he gets to be a regular employee of a US company (legal, but in-house compliance of the company may not like it) he pays taxes in the US and has to file taxes in Germany as well. However, he can file his taxes paid in the US to the German authorities, so he does not get taxed twice on the same salary. It's called DoppelBesteuerungsAbkommen and I suggest you get a German tax accountant to file for you.
Alternatively, he can become a Freiberufler (freelancer) or Selbstständiger (S-Corp equivalent). This way he can write invoices to whoever he wants and only pays taxes in Germany. Whether the US company will accept freelancers from other countries invoicing them is a matter for their compliance department. Some do, some don't. Although the Finanzamt (German IRS) is a big help and very forgiving to people starting a business, I would advise a tax accountant for this, too.
As a regular German employee, health insurance automatically comes as part of the job. With both models detailed above, you will need to find your own.