I don't understand why it has to be like this, is that a bug? In theory, provided you set some units as being replacements for other, without a template for them, then they should be sucked out dry by the other units, and that's it. All the data and logic is there and there is no need for a series.
Actually the data and logic isn't there, because the replacement system works using series. This is what allows it to for instance replace Rifleman Mk I losses in a formation with upgraded Rifleman Mk II - it won't replace existing Mk I but will replace lost units with the new version.
The system simply isn't programmed to replace a unit with its exact match to replace losses. It sounds simple but it would be a completely separate, parallel system which doesn't currently exist.
What does seem weird is that you need to have a unit series for every unit in order to do replacements. That sounds weird and might be a bug.
I actually have units replaced with same unit with this setup! You just create the serie with tge only unit you have available for that setup.
So I had my occupation forces all mixed in numbers. I have assigned all brigades but 4 to replacement at voila, next cycle all 4 brigades and relative companies were refilled at best of their ability (some engineering units were away drinking in Valhalla) while the units used for refill were left with just few units which I have cpombined into a big reserve brigade.
Now that I know how it works I must say 2 things.
1. I am very satisfied with the mechanic
2. It doesn't work as it was advertised, however, having understood the mechanic behind I know why it is the way it is. It actually allows for even a better management than I originally thought which is a plus.
Probably Steve got just lost into explaining it as it is obvious how it works once you set it up. Maybe the concept of series should go before so that the player understands that it is mandatory otherwise the way it is now you are left to believe that as long as one unit is set as replacement and the other has a template it will magically work.
Then while explaining the series you can introduce the concept of upgrading.
Currently, reading the post they look like 2 different mechanics.