Its a REPLACEMENT (rule 7.9).
And indeed a unit in the Surrendered box would "eat up" the two replacements.
I looked at this lately and the rules seem to totally contradict this.
7.9 states: "From the Surrendered Units Box, the owning player must
discard two cards from his hand for each Replacement ."
A replacement is defined as a UNIT returning from either box with a cost of one or two cards.
The card states; "Last Reserves: Play during either player’s Card Phase to immediately receive and place up to two Axis replacements and lose
This implies you get two units and the cost is zero, rather than 4 cards.
If your ruling is otherwise there need to be serious text changes to either the cards or the rules, shrug.
On that same note, the implication of the Russian Joker is that the single replacement granted by the card can get a unit (replacement) out of the Surrendered box with just the one card. (cost would normally be two cards but the Joker states otherwise)