@theveteran I may be wrong but I don’t believe it has something to do with surrendering. Rule 9.23 says : “A nation that loses its capital loses all of its cash IPPs to the bank (even if it did not surrender) with the exception of France (which loses it to the conquering player)."
Personally I never removed KMT/CCP IPPs when they lost their capital, but I don’t see why we shouldn’t.