The crux of the question is: how would limiting elite reinforcements (just elite reinforcements and not regular reinforcements) to units on or near cities enhance gameplay? Or is KISS? I'm open to being convinced, but I don't see the advantage at first glance.
And secondly how does this make sense in a real-world context? If I can get regulars to my units then how would it be harder to ship experienced soldiers to the same unit? Do they weigh more? Lol

If experienced trainees are available in a city it would be trivial to ship them anywhere where supply routes are open.
"Ok... so the reduced amount of reinforcements you´ll get if your unit stands beside an enemy unit, which case we have in the current version, is un-KISS, too? And to stretch the rule so it MUST stay free AND on or beside a road to get the full amount of reinforcements is un-KISS, too? Just a thought. Think about what KISS is about actually We already have hidden rules about reinforcements so it would not be a problem."
--Having supply limitations when next to enemy units is KISS and perfectly reasonable. I am not arguing that point at all. But when you extend the rule to limit reinforcements to when they are near a road or city does in fact complicate matters. Imagine that such a rule is implemented, there could possibly be quite a few levels of supply which can be tedious for the player to track. Let me take it to the extreme here. Suppose:
1. full supply: Unit is in city that produces supply.
2. good supply: unit is on road/rail within X arbitrary units of city that produces supply
3. fair supply: unit is on road/rail farther than X units of city that produces supply
4. restricted supply: unit is not on road/rail or city, or unit is in contact with 1 enemy unit
5. poor supply: unit is near 1 enemy unit, but not on road/rail
6. very poor supply: unit is "surrounded" defined by being in contact with some number (3 perhaps) enemy units
7. no supply: unit is cut off, in a pocket or some such situation where any amount of supply is impossible. Paratroopers landed behind enemy lines perhaps as an example.
--So you see how quickly this can escalate into a complicated set of rules? Now with the above system of rules you now have to track whether the unit has a path back to a supply base and how good that supply route is. In my opinion it's definitely beyond the desirable scope of this kind of game as operational systems such as supply are more abstracted in favor of tactical gameplay.
--So what I suggest is that the same rules apply to all reinforcements and supplies based on the following simple rules:
1. full supply: unit is not in contact with enemy
2. partial supply: unit is in contact with 1-2 enemies
3. no supply: unit is in contact with 3 or more enemies.
"The KISS principle depends on how rules are communicated. If a player attempts to reinforce a unit with elite replacements in a situation where the rules do not allow, you can always present a message (popup or otherwise) indicating that function is not allowed unless the unit is stationed near a base, city, or whatever the rule states. Consistency and clarity go a long way in the application of KISS. When the application of rules seems inconsistant or lacks clarity all bets are off."
--Agreed, totally.
That's what I'm trying to get across.