I think part of the problem is the vagueness of the surrender mechanic. This is the only can I can recall that has this mechanic. The idea isn't bad, the implementation seems to be the issue.
When I say it isn't bad. Let's assume the UK surrendered to Germany in the Battle of Britain.
Wouldn't the UK "gift" Canada, Australia and India some of their assets, colonies and outposts?
However, the current mechanic seems too random.