All that said and as this usually has a minimal impact on the game I can see why it gets low priority. But to simply defend the obviously deficient WAD as 'ok' is not valid.
To say we 'can't model everything with the existing budget is the realistic and a more acceptable answer. This does not 'ruin' the game, but it does seriously detract in some instances (and of course is TOTALLY unrealistic) No one can surrender what they don't have control of. If there are 10 Allied corps holding a line in Belgium and the 'government of Belgium' surrenders nobody moves effectively nothing happens at all except presumably the Army and Navy of Belgium capitulates and practically speaking this would not happen either if intermixed with or near Allied units as they would likely (and did) defect to the allies.
The existing solution is a design 'shortcut' which any simulation must have many of if it is ever to be actually published. Less shortcuts may or may not mean a better game (usually less is better) but in any case it reflects the practical limitations any for profit organisation operates under. Even unlimited resources will never yield a perfect simulation. Even Blizzard with nearly bottomless pockets for example makes many trade offs in their game design to save money, and I expect they spend more on software implementation in a day than Wasteland has spent on all their games.
doomtrader,
The instant "beam me up Scotty" routine where all units not belonging to the conquering alliance get beamed back to the force pool on the same turn the country surrenders seems a bit premature to me. I've seen some games handle this by giving the player a one turn grace period to retrieve his units. For a case like Belguim surrendering it would give an Allied player a turn to pull back out of Belguim to avoid the big beam up. In a case like France surrendering that becomes more problematic since bugging out involves being able to load up units onto transports and that takes a whole turn in which if the port has become vacant those loaded troops could be in harm's way and get wiped out by advancing enemy units into the port.
I doubt there is a solution that would pelase all players. Knowing that units in countries that just become conquered by the enemy get beamed out to the force pool does help one make decisions that cover that contingency. Nothing like a little Premature Evacuation to keep your forces on the map when you know time's up in some country about to be conquered.
Omnius