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Both Japan and Italy are completely conquered and this causes several territories to be converted to neutral minor country. However, at least two of these territories, Hainan Islands and Sardinia, were completely conquered by the US several turns prior. Also, several allied air and naval units in these territories are overrun, forced to rebase and disorganized. As I understand it, any territory that's been conquered should stay under the control of the conqueror and have not reverted to neutral.

game turn just prior to the conquest phase.

Follow-up. During the conquest phase of the next turn following this turn's conquest phase, Corsica is "conquered by the USA."

And so is Hong Kong. Both of which were liberated several turns ago by the USA before Japan's and Italy's conquest last turn by the USA.