As seen here: https://clips.twitch.tv/TacitDistinctMangoOSfrog

Vanilla Cultists, no mods or other funny business. An AI opponent offered me a city as a truce deal and I took it...and kept it. It behaved like a normal city. I could not ask for cities myself, but the AI could and continued to offer them. I have the finished game save file if that would be useful.

EDIT: Assuming reproducible since the AI kept offering cities and giving me chances to add to my empire. I'll see if I can get it to happen again tomorrow on a different savefile.

This bug does appear to persist, by the way. 

There are only a handful of major Endless Legend bugs left . To my knowledge: this one, the Allayi bug that means their luxury bonus applies to stockpiles (letting them use stockpiles to make stockpiles, etc.), some Forgotten bugs (valuing trading technology far too highly, and I believe some pearl building not functioning correctly - maybe Strategic Intensifier? - due to it producing science instead of dust). A final fix for these would be very welcome, but the devs are probably quite busy right now.