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another poster recently complained they joined SU, and was made a puppet when SU capitulated to Germany. I'm not completely sure that is true anymore. Maybe if you are involved in the war at all, you are subjected to the peace deal.
Also recently as Japan, I finished off China pretty fast, never touched Sinkiang lands, and I was able to annex them, so I don't think what you say is true anymore. I know it used to be.
The only time one is made an exception is if they're in the faction but not in the war.
I'd have to check the exact requirements in the game rules, but i have repeatedly rushed Britain in 1936 as both Italy (with German help) and Japan (solo), and can say for certain that although their subjects all joined the war, Canada, South Africa the Anzacs are not in the peace conference as defeated nations (however you are able to satellite their integrated puppets India and Malaya) - in your example perhaps another country attacked them, were you watching Brazil the whole war?
Edit: Just checked the help screen, the defeated nations includes countries that "have at least some war participation dealt against them" so if you get a ship sunk, your territory bombed, or suffer casualties from one of the winners you will be included as a defeated nation (even if they not are in same faction, unless they are also at war with the winner), but not if you are completely untouched by anyone who is at war with the losing nation