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I think the fact that I had him imprisoned had something to do with it, but now I'm next to an even larger religious enemy. Oh well, at least when I lose I'll lose in a grand fashion.
I'm uncertain, but I believe the difference is in when you send them a peace offer or when they send you one. I find when I accept their offers and they have lands outside the lands I want, I get more than I asked for and landed muslims in the bargain. I've never gotten unintended lands when I send the offer.
I think it works like Dorevai wrote. I was thrown in deep s*** when accepted peace offer from some Emir and got whole his country with muslim vassals who had -100 toward me and rebeled few days after. I was not abble to revoke them without penalty for all my other vassals. I dont know if it is WAD or bug. IMO there should be dialog option to revoke/kill/banish them without penalty or let them stay as my vassals.