The short film, one of a series commissioned by Thai generals to promote "Twelve Values" it wants the kingdom's youth to adopt, told the seemingly innocuous story of two schoolboys who learn to accept that winning and losing is part of life.
But viewers were left shocked by the animated opening sequence which clearly showed one of the boys in a classroom completing a portrait of the Nazi chief standing in front of a large swastika.
"This is a massive failure of understanding of history by a Thai government administration that has explicitly mentioned wanting to teach history," Responsible History Education Action, a website set up to combat the use of Nazi imagery in Thailand, said in a posting.
"We are concerned and deeply saddened that the image of Hitler and a Nazi swastika was featured in a government video meant to extol values to the Thai people," the website, set up by an American expat based in Thailand, added.
Images of Hitler, swastikas and other Nazi regalia are fairly commonplace in Thailand, adorning T-shirts and memorabilia, a phenomenon blamed on a lack of historical understanding rather than political leanings.
Last year Bangkok's prestigious Chulalongkorn University was forced to apologise after its students created a mural depicting Hitler during graduation celebrations. A Catholic school was also left red-faced in 2011 after students dressed up in Nazi uniform for a sports day parade.
The latest deployment of Nazi imagery was greeted with bafflement on social media.
The director of the film, Mr KulpKaljaruek, told AFP he did not mean to cause offence but instead was trying to illustrate the child's moral progress.
"It's symbolic. The child is going in the wrong direction." said Mr Kulp, whose father is head of Kantana Group, one of Thailand's largest film studios.
"You know Hitler had quite strong power in the past. But not in a good way. So it's like he (the boy) is learning from that until he becomes a good person at the end," he said.
Mr Kulp confirmed the junta had approved the film but said "nobody asked" about the contentious scene featuring the painting.
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