v1.12.0 build
18858.2329086 (Modded)
The issue arises fairly early on: Playing as Orion, I've hopped over to Ulthuan using the world roots, after discovering that Tullaris Dreadbringer (a modded dark elf legendary lord, starting at the Shrine of Khaine) has wiped out and eliminated Avelorn. Taking advantage of the situation, I destroy Tullaris' army, liberate Avelorn and turn Alarielle into a vassal.
... Except when I then allow her to claim back her lands, the forest health doesn't change, and it doesn't register the heathlands as pacified - instead treating them as neutral territory.
This might just be a problem arising from my (rather extensive) usage of mods, but nonetheless would be worth looking into: Vassals, even moreso than military allies, surely should contribute to forest health?
As for reproduction - there's a fair few options. Since I suspect the issue is one that applies for all vassals, instead of just this one vassal, it oughtn't be too difficult to test.
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