I think an army that is surrounded by enemy controlled tt and cannot trace a line of supply to a friendly capital should suffer a penalty.
For the sake of example, lets say the Germans storm through Belgium into Picardy, and through Switzerland into Burgundy, cutting off a French army stubbornly remaining in Lorraine rather than having fallen back.
Two ideas:
1. An out of supply army cannot fire artillery, nor use artillery to promote other units. Armies in direct supply had a hard enough time getting adequate artillery shells, isolated formations would soon have run out.
2. Such an army has one (of its own) turns to breakout, or be reached by friendly forces. A single contested adjacent tt is enough. If this is not achieved, and the tt it is in is contested, then the army must surrender.
Infantry are taken prisoner.
Artillery and tanks are captured and converted to enemy units. (I’m assuming the defender is clever enough to fly any fighters to safety; I’ve not read anywhere about captured aircraft being used.)
Consider SZs too big to allow a fleet to be surrounded as such, though see my naval refueling idea.
If you like the idea of capturing units, perhaps consider that when you capture a tt outright a proportion of enemy casualties might be treated as captured.
POWs must be returned to the original owner if the captor is eliminated from the game (revolution or capital captured).