Today I was able to demand the surrender of an enemy. I had no idea what would happen except maybe I would get all their cities. However the enemy sovereign joined me as a champion (love it) and the cities were destroyed (don't love it). It makes very little sense for the cities to disappear triggering a mid or late game colony rush.

What I would suggest is that the defeated sovereign joins the victor as usual but as a way to save their people (I could imagine poor procipine joining magnar to save her people). The civilisation would remain independent giving permanent tribute to the victor.

If the defeated civ should have a change in circumstance and get strong, it could demand or fight for the freedom of it's sovereign.