Nation member bonuses inherited by vassals and vice versa as if the vassal towns are within the nation. Making a vassal nation is like creating a new nation and there really isnt a reason why to do that other than a temporary proxy siege. Since Zaify said u can make vassal nations to exert "soft power" in other regions I reply with this suggestion. Its very bad funding one especially if you're already part of the nation before,have claimed like 300-400 chunks and need to be a new nation because of the distance limit. If I do that I'll go bankrupt in 2 days due to overclaim.

So why not do this,vassal nations would have a reason to be vassals now and not just in name or threatened to be one and also the nation that has the vassal would benefit from having one in the nation bonus aswell,not just the vassal. So it would be a win-win relationship depending if the overlord taxes the vassal.