Heh, glad to see my disclosure on Emerald had SOME effect!
More seriously though, the ability to disclose a defeated nation is one of the big points of strategy in the game. It lets you take out the occasional undefended bomber, surprises the enemy, forces him to take extra precautions with garrisons, robs him of indemnity, etc. Additionally, if the enemy got the indemnity for conquering an undisclosed ally, there would be little point in keeping your SAs hidden, especially on small maps.
As to not making sense: other than the fact that gameplay overrides backstory and not the other way around, remember that what you see is only a representation of the country and the troops in it, not an actual satellite photo or some such. On top of that, the Secret Army is just that: secret. If those "secret" tanks and mechs were parading around the capital, it would kind of defeat the purpose of keeping them hidden. Just think of them as being hidden in caves or forests or something until they're called upon to start blowing things up.