The Italians only occupied Orel. The other were either German garrisoned or were not "partisan" prone.
"whose unit is currently in the hex" and "who controls the hex" are not necessarily the same thing.
If you want to see it in action, fire up the '42 scenario (as Axis)
Mouse over hex 125,41 (NW of Kharkov) - it'll list "USSR Occupied-> Germany"
Now take the Italian XXXV corps (NE of Dnepropetrovsk in hex 125,43) - march it to 125,41 and then say 123, 40
Mouse over 125,41 and now see it occupied by Italy.
BONUS: After this, take List HQ, in hex 125,42 and move it straight to 123,41 - And notice that hex 125,42 is occupied by Italy, despite Germany being the last country to have had a unit there.