A good practical example is the Finnish winter war. The Russians got a few territories while Finland remained a free country. Those territories would still be considered 'occupied' though.
If this wasn't done by event the winter war would go like this I guess: the Russians defeat the Fins, national unity collapses, a goverment in exile in.. where? would form, the russians get occupational control over entire finland. As russia you would then have to release finland as a country (or continue occupying it). What happens to the Karelian isn't clear yet, does Finland get it back or does Russia have cores on it and get it?
If Russia can get the provinces it has cores on then it's result is historical, although with a detour (russia occupies entire finland at some point).
Another example, germany declares war on portugal in order to get the azores.
'Free portugal' would never accept losing the azores to germany. So germany would put up 'vichy portugal', which still has ownership of the azores but gives military access to Germany, allowing it to use the islands as base.
It doesn't seem like an improvement at first, but in HoI2 you could go to war with portugal and get everything except Lissabon through a peace-deal (if they weren't in the allies yet). That doesn' seem right either.