What were Picasso and Matisse doing during World War 2?

During WWII Picasso was quite a celebrity artist and Hitler being an art lover and an artist himself prominent artists were given some leniency. Yet the Nazis harassed him nonetheless. Once, Nazi officers came into his apartment in Paris and saw a photograph of Guernica. The officer remarked, "This painting, you did this."

"No," replied Picasso. "You did this."