… I think it’s just an old holdover from Anniversary or something.
Yes indeed, it has been an Anniversary rule. Starting from Spring 1942 the refund rule has been implemented.
USA is not at war,
Germany takes Gibraltar, which gives Italy the oppurtunity - using the NB in Gib, to take East USA - which is undefended.
The capital falls instantly. Does the factory in EUS, just NOT get upgraded? does it get upgraded upon the attack, and then demolished? or does it get upgraded after Italy takes it!? Mwahaha.
The rules do not specify, that the factory has to be under U.S. control….
The ICs become major the instant Italy declares war on the US, which is BEFORE it conducts combat. Thus, when Italy captures EUS, it has a major, which is immediately downgraded as per the “captured majors become minors” rule.