Bottom right corner, there is an eagle symbol. That's the button. But that won't work with every region for some reason. It seems that you can only release vassals on a faction's starting region. For example, using the bottom on Trebizond will release the Trebizond faction as a vassal, provided that faction has been previously destroyed.

Hey, I saw the "Release as vassal" button on some screenshots, but I found also that there are few ppl like me missing this option in the game. Kingdom of Bohemia destroyed by Austria, I take the Prague as Poland and ... there is no subjugate like in original Attila AND there is no button anywhere with the eagle to release after. Bug? the feature was revoked? anything I can do in files/cheats to trigger this action :) ?

Answering myself, apparently this video says you need to wait 10 turns before this option is available :) https://www.youtube.com/watch?v=GXZQV1w4Hyo