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It can also be diplomacy by other factions, there is a diplomacy option to ask a faction to stop being a vassal, or a protector to cancel vassal state. For example: a faction could have given them money or tech or something, and in return they demanded that new spain cancel its vassal status
Checked both New Spain's and Spain's diplomacy for protectorate status: None shown.
So I thought: "What the heck do I have to lose by capturing Trinidad now"? Sure enough when Spain captured the region, the independent ally New Spain flipped all it's regions over to Spain..!!! All I can attribute this weirdness to is a "BUG" in how information was displayed, or not displayed..
As a side note: That above 4168 figure went away after New Spain flipped, plus Spain lost 6294 that it had in trade with New Spain each turn, grossing a loss of 10462 putting Spain's economy into the "RED". Needless to say went back to a save prior to capturing Trinidad and kept status quo. These missions the game doles out seem to do more damage than good when accomplishing them.
What I like about this game is: At least you get to kill the rebels and there are no repercussions with political BS in diplomacy or otherwise..
Spain captures the region with New Spain's help, with that done "Hostile" New Spain ceased to exist, flipping all it's regions over to Spain. For those of you who might worry about New Spain's diplomacy status with Spain to complete a mission, it's something to ignore (as far as I am concerned).
Once they learn this, nothing else matters