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Askaron

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Playing as Italy, I managed to capture Yugoslavia. But there was no choice wether to annex or release them: all the regions became suddenly mine. I didn't want to hold Yugoslavia's territories, I just wanted to release them as democracy. How can I do that?
Plus, I noticed that, when capturing Albania, I had the choice to release them. Why is that?
 

LZT VIKI2

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There is a random chance that they will be auto-annexed. If you wanted to release Yugoslavia I would recommend just playing a new campaign as Italy.
 

Balthagor

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It is not random, it is based on loyalty. There are two notable cases (Yugoslavia and Czechoslovakia) where they are made up entirely of territory loyal to someone else. Loyalty is used to determine liberation/colonization so it is not possible in these cases.