ORIGINAL: Q-Ball
I'm all for historical accuracy, but unless the complexities around willingness to fight can be coded (which they can't for AE), then I think it's best to leave them out. Otherwise, they can be abused; the Japanese player can recover the morale and train them up over time under the current system, and have fairly decent divisions to serve the Emperor's whims by 1943. Not realistic.
Probably same goes for Manchukuo and Chinese Puppet troops.
And I agree, the second the Allies invade, they probably quit.
Thais (and the other Japanese puppet forces) have been given fixed (very low - nonexistent) replacement (squads & devices) rates and cannot be assigned to other HQ's (they're permanently restricted and can never load on ships) in the AE.
There are still some ways to 'abuse' them in the AE, but their use(fulness) is fairly limited. Especially the Thais are 'one-shot wonders', if they take any combat losses, they can never replace them.

