I want everyone who is in the region to be able to participate. Try and put yourself in the position of someone who isn't really interested in military RP but finds, say, the diplomatic RP more fun. They get attacked by a neighbor and because we are saying they must participate they lose their whole claim. So now not only is their nation essentially lost because of an RP they didn't really want to participate in but now they are prohibited from participating in regional activities that have nothing to do with RP. So there needs to be a limit to how much of their claim a nation can lose.

I think it's unfair for someone to permanently lose their entire claim, but I also think it's entirely unrealistic for the victor in a conflict to be prohibited from taking land from the loser. After all, a lot of wars are fought over just that, land. We could remedy this by limiting the amount of land the victor is allowed to take from the loser. Say, for example, a quarter of the loser's land is the maximum that the victor is allowed to take, or something else along those lines.