well, it does automaticly flip during the advancement aswell. Go and watch World War Wednesday and show me any state which isnt completly controlled by a single country, even if some other country (like germany or estonia for example) occupied soviet land. This is actually a discussion we had a while back aswell, which concluded in that it seems like occupation flips to the person which occupied the most of the state. Frankly we dont exactly know how it works since, to be honnest, the devs never responded to that discussion since they were probably busy getting the beta candidate done.
As far as i am aware if you have one big or multiple battleplans with fronts without a gap inbetween, the AI will automaticly evenly extend the front instead of leaving gaps, so that problem shouldnt really be occuring. You'd have to have way too less divisions for them not being able to properly push the front forward.
