Yea you are correct. I guess POWs would never really work in this game because unlike real war it does not matter how many men you lose
I’m not convinced the idea couldn’t work, only that the current idea of it wouldn’t work.
How about a situation where, for every 3-5 infantry you kill, you gain a PoW that can be placed anywhere. PoWs need to be protected from liberation and every PoW in a province over it’s IPC value costs you 1 IPC/turn in support.
You don’t muck with the balance around attack/counter attack and amphibious assaults.
You’ve got incentive to distribute the PoWs you capture and risk their liberation, rather than stock them in your capital.
The Axis, generally considered the stronger side, will take brunt of the downsides since they are killing large numbers of Russian and Chinese infantry. Might actually balance the game.