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The lone Hungarian unit in the scenario does not appear to be limited properly by the Home Defense policy - is there something I'm missing?

As per the scenario setup in the Playbook, 31.8.1, Policies says "The Home Defense policy is in effect for Finland, Romania, and the USSR."

It's working as intended.

Ah, thanks, turns out I was looking at an older version of the playbook where Hungary was also included.