After defeat in the battle of Adua, and annihilation of its army, Italy had to abandon plans of conquering Ethiopia.
This would never happen in vic2.
Instead, Italy would send another army. And another one. And would loose 300 thousand men if needed.
In vic2, you play Egypt and Britain attacks you. You cornered and anihilated 60k British army. Whats next? They send 200k more from India. And more, if needed.
I think we can all agree its plainly wrong.
Here is my idea:
Warfare should have some mechanics to ensure its proportionality. Not every war could be a total war back then. Limited forces could be used in most cases.
Your society can demand you to stop after one defeat. You should not be able to dedicate all of your resources to a small conquest war. Emptying your borders to fight colonial war on another side of the globe should be considered pure madness.
This would also make smaller nations have some some hope in opposing great powers. Defeating one expedition force could possibly win their freedom for a time being.
The only Paradox game in history which got this right was, weirdly, Crusader Kings 2.
That is because most of the warscore came from battles, not land occupation (although occupying lands, especially wargoal lands, helped a lot). That makes it unique in all PDS games so far in my opinion.
You could start off as a small Visigothic kingdom in Spain (lets say in a modded 711 AD scenario), take on the gigantic empire of Umayyad Caliphate stretching from Indus to Lisbon, and still win if you somehow beat their armies in a row and capture a few counties. You could conquer England as Normans with like 5-6 good battles. You could win entire wars by destroying enemy armies before they could gather in one place and become doomstacks. It was even possible to force the scary Mongols into a temporary white peace if you were fast enough - by beating their initial armies repeatedly while rushing to take out key cities, ending the war before their real unbeatable armies marched on you. Mercenaries and a big pile of gold were a great thing in this regard.
That doesn't mean occupation didn't help, it just meant that battles were always the mainstay. Holding warscore was always an easy way to reach 100% quickly, but not always necessary. Battles were rare and meaningful.
Quite a good system that they unfortunately dropped with EU4, where battles don't do much and the only real way to win is to snipe enemy's manpower regeneration capacity as fast as possible (i.e. occupying their high development lands), allowing you to occupy more lands without retaliation. Winning battles serves little purpose other than to facilitate easier land occupation afterwards (plus a bit of prestige and military tradition).
And then PDS went that way in the extremes with Imperator and its casual, boring, button-mashing map painter style - battles are entirely pointless and worthless, give next to no warscore, and nothing happens without occupying land.
You can wipe out 90% of Rome's manpower, kill their emperor, fight a 20 year long war where you win every battle, but it means nothing without occupying lands. They will, as you said, keep coming back with reincarnated armies and never seek peace. Your warscore counter will sit at 0. Pretty ahistorical, considering the antiquity was all about massive battles deciding fate of empires (Rome stopped their conquest in Germania after one disastrous battle in Teutoberg, earlier the Seleucid Empire went into decline not long after losing the single but massive battle at Magnesia).
I hope Victoria returns to CK2 way, where battles were more emphasized and land occupation was secondary. That would create the result you want where a modernized and militarily successful Egypt can beat back the British to the peace table, without having to actually sail over to the UK and occupy London.
For examples in this era - Germany lost WW1, yet they hadn't even lost an inch of their home territory by the end. They almost lost Prussia in the beginning, but recaptured it immediately afterwards, and for the rest of the war the both the eastern and western fronts were fought outside of Germany.
Britain did not have to land giant armies and occupy 2/3 of Qing China to win the first Opium war, they just dominated the seas, defeated their navy completely and began blasting their coastal cities and forts into dust until the Qing gave up. Japan didn't have to occupy all of China to take over Korea in 1890s either.