Because the creators thought it was enough to put their colonies in but not count it as an independent faction hence why you can’t liberate their homeland because it’s marked as German Grey and how it lacks units, income, and turn. So they make it under this stupid exile in govern status.
Sorry, I don’t get that in the context of an argumentation for your previous statement:
The game actually treats Japan already at war with the Dutch on turn 0.
As clearly stated by the rules Japan starts the game being at war with China only.
There is no state of war between Japan and the Netherlands.
In order to attack Dutch colonies Japan needs to establish a state of war with UK/ANZAC instead.
Rulebook Pacific 1940.2, page 37:
Japan may attack Dutch territories only if a state of war exists between it and the United Kingdom and ANZAC.