Everything about Vassalization is weird in this game. You can also hit the magical “Yuan Shao” moment yourself really easily, because the AI takes vassal power into account as your power during negotiations, which means once you have 3-4 vassals, your military might looks unbeatable and most of the AI will become your vassals with nothing more than a “guarantee autonomy” thrown in.
They still won’t generally be of any use to you in wars (for whatever reason most of the AI will just sit at your capital even if you tell them to go to war and they are loyal and like you. I’ve had a few random AI vassal armies like Gongsun and Liu Bei actually do stuff, but it seems like the non-expanding AI’s are content to just camp out at my palace. But even if they are worthless outside of the 20% of their income you get, you still win the game without having to capture their little handful of territories.
Oh, and there are certain AI’s that will just rebel against being a vassal every time as far as I can tell, Cao Cao and Yuan Shu most infamously. They do generally wait until your armies are further than one move away from their capital before doing so, but it’s still a hopeless venture.
tl;dr - Despite a great many diplomacy improvements, the vassal system in general just needs some sweet lovin from the devs.