I think it depends on the games, my game with cpt flam is in early June'43 but I don't think it's screwed because I am passive and not attacking much so he didn't lost any units or ground, and once his pool will be spent and the units will be refilled, a good fight can start again. In current version I think the problem starts as early as Jan'43, but isn't deadly until Jan'44 (unless you have heavy fighting).
We are fixing rifle squads, but there are many items like the Art/AA/AT guns that have problems as well with filling up, and that problem won't be gone unless we add upgrade paths (and it's not possible for all cases).
Unless the code will be redone to create need for new elements, swap out old elements and scrap infantry elements quickly the problem will return here or there (though not in as critical place as German Rifle Squads). The only other way to fix it, is either to simplify the ground element/TOE setup to have upgrade paths for everything, in line with TOE upgrades (at the same moment), or to create some "virtual" upgrade paths by duplicating some elements and/or TOEs (not good, may cause other problems). I'd go with fixing the code, should be simplest of the three.