I don't know, in all honesty. It also depends what they could do to stop it. The mafia ma have devout catholics among the members, but that doesn't mean they will follow what the Church tells them.
As far as I know there has not be a clear-cut damning evidence that either the Vatican knew or didn't try to stop it. Or even if it tried that it could have stopped it.
Again, the so-called Independent State of Croatia (NDH) was a secular Fascist state created after the Nazi occupation of Yugoslavia and very unlikly to tailor its policies according to Vatican's wishes unless they were in harmony with those of Hitler's Germany (which was not well disposed towards the Catholic Church as too "pacifist" and "unpatriotic").
The damning evidence agaist the Catholic Church's behavior during this time involves forced "conversion" of Orthodox Serbs into the (Roman) Catholic faith. But that was the Church's policy ever since Austrian Empress Maria Theresa instituted aggressive Uniate conversions in the 18th century.
Accoridng to modern international standards,,such an act would be considered genocide, by definition, but in those days it was not considered a crime, but a right.
The "evidence" against the Vatican comes from documents and photographs showing Croatian Fascist officials (Ustashe) with leading Catholic clergy. That a weak case in my opinion.
The other one was the fact that some former priests (pictured below) chose to join the Ustasha concentration camp guards and participate in atrocities against the Serbs, Jews and Gypsies..
But all this falls short of any overwhelming evidence that the Vatican, as a matter of official policy, supported either the Fascist regime or approved of its atorcities, although there is no lack of many conspiracy theories.
Is this another example of what we discussed earlier where organizations become "organisms of sorts" and protection of the organization becomes more important than the mission
I would say it is more a reflection of the self-righteous, self-serving, fallen human nature.