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So with the latest patch there does seem too be a conversion issue, where ALL hexes convert to the conquering nation regardless of other non surrendering ownership or even units, I recently had this happen with a joint USSR/UK invasion of Persia, once the Soviets conquered Persia the UK which had been invading from the south lost all their territory and their units were stranded

It's already on the list specifically for Iraq and Persia. But its an either or.

Each country has a different set of rules

Norway and France convert all.
Italy does not.