Other than the presence of a Viceroy, what does a Vassalage Edict do?
What benefits does a kingdom gain by creating a vassal state?
The Optional Kingdom Rules in Ultimate Campaign would allow you to create a smaller realm that could be run by a single player in Kingmaker.
That is if a single player wanted to run "their own realm" their own way. (What nonsense.)
Adding another Kingdom completely may be too large for some Kingdoms to do so, due to Unrest. So setting up a Viceroy in a conquered Kingdom could be used as a stopgap to later annexation.
Well that's no fun! I want a reason to have the PC kingdom to grant a vassalage to the Sootscale kobold tribe.
Then create a NPC follower of a player who is a kobold, or better yet a Sootscale kobold.
Add a little regime change and set up your Viceroy.
Have the player run the Domain of the Sootscales through their follower.
New Vassal or Colony: When you issue a Vassalage edict to create a new colony or kingdom, you may immediately establish an embassy, treaty, or alliance (your choice) with your new vassal. You may decide that the treaty and alliance are balanced or unbalanced. These decisions are automatically successful and do not require rolls.
So if your players choose the treaty/alliance option they gains the 10% (or 15% in case of unbalanced) of the Economy/Economy and Loyalty of their new Vassal Kingdom. That's a good exchange for some BP.
Also, as Queen Moragan suggested, I'll personally let your players have one (or more) kobold NPCs to run the Sootscale Kingdom.
In mine campaign I have planned of giving each of them a kobold wyrmling to foster and use as their "mini-me" alter-ego.