Optional Surrender - question

[wiggum]

"Optional Surrender – when this rule is selected, then Broken units which
have been assaulted and have lost the assault, but have no valid retreat, are
eliminated."

So what does this rule actually do ?

I mean, if this rule is not activated, what would broken unit that is assaulted and lost the assault but has no way to retreat do ?
Just stay there ?
Sorry, this optional rule sounds like it should be a standard rule or maybe i dont understand correctly what happens in this situation when the rule is not applied.