I like the recruitment center idea of infantry only. It’s realistic and not overpowered. Now, to prevent abuse by Japan particularly, simply make it that you may only build recruitment centers in original territories or pro-your side territories you own that are 1 IPC or more. Furthermore, make it that recruitment centers get destroyed if the territory is overrun. These small adjustments work beautifully for both history and game balance. Observe:
Germany can recruit from its eastern allies, the northern European Quislings, and Poland (conscripts).
Russia can get far eastern troops to secure its border with Japan and also reinforce the frontline with locals from around the Soviet Union.
Japan can get help from its ally Thailand, and recruit soldiers from occupied Korea and Formosa and Japanese in Okinawa. Iwo Jima might look like a problem, but it’s really not. I doubt Japan would want to be build there, and even if they did, it could be excused as Japanese mainalanders volunteering to defend the island.
The United States could recruit citizens from Hawaii and Alaska and the freedom-loving Filipinos. They could also try to get Central Americans or Brazillians to fight, but as was really the case, it’s not practical in the game.
The UK could recruit soldiers from all around the Empire. All the African nations can send their local military or volunteers (it’s amazing how much Rhodesia did in the war), Palestinians and Zionists could theoretically help in Trans-Jordan, more Scots and Canadians could make a showing (not really good in a gameplay perspective), Persia could be persuaded to fight (but it’s way better to build industry there), Chinese could join in defense of Hong Kong, and southeast Asians could even make an appearance (many of them fought Japan).
In essence, China already has this recruitment rule on an accelerated scale.
Italy will be able to recruit from anti-British locals in Africa and also friendly Albania.
ANZAC could recruit soldiers in the west, and New Zealand can finally get the attention it deserves.
If France were ever liberated, then locals from around the empire could be recruited. The majority of French troops in the empire were actually locals on most occasions.
I like this idea plenty.