The only reason that changing the shape of the territory to a circle would have a functional impact on the game is if the circle makes it easier for you to have more or fewer average connections than a tentacled blob. E.g., maybe the Stalingrad circle is adjacent to 5 other territories, whereas the Caucasus blob is only adjacent to 2 other territories. In practice, most maps don’t maintain any such distinction – you can usually arrange the blobs to have the number of connections you want, with or without circles.
Still, I love using circles for cities, because it’s visually arresting and helps explain the strategic structure of the game to casual players – much easier to point and say “capture those circles!” than to try to explain about barely visible victory cities or (worse) to have to insist that repeated play has shown that territories x, y, and z are crucial to victory, even though those territories look visually identical to all the others.