I have found that it puppets if that's what your wargoals are. If you have conquer as your wargoal, then you will annex them. If you have acquire territory, then when you gain all the VP's, you'll have peace but they cede territories to you. This is the new way the wars are fought. It isn't a bug. It's just a lack of a manual and a lack of doing what the game wants you to do.
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Calling the available documentation a 'manual' may be giving false hope to the intended reader. In fact, it is described as a 'feature overview'. In my opinion, 'featurette' would be closer to reality. Anyway, what is available can be found in the FAQ section (FTM - Manual).
