When does a city recover from occupied status?

I lost my capital to a naval invasion from the AI around the renaissance era. After some fighting I eventually took it back. It now counted as occupied.

After the war ended it was still occupied and it never recovered, it stayed like that having no growth until the end of the game.

There was no options about the city in the peace negotiation or in later diplomacy. Did I miss something about occupation mechanics or could this be a bug?

I did some digging and from what I can find, this link generalizes what I found.

It seems as though since the city 'belongs' to a another civ, it is under hostile military control until you completely wipe out the original owner. I play the game a bit and can look to test it tonight, but I believe I had this problem before and it also when away when I wiped out the original owner.

Will update when I test it myself.