And there’s a definition of occupied that makes that true. However the colloquial definition of occupied generally involves actual militaries actually occupying actual territory.
Few would consider the North during the American Civil War to be occupying the south because of it’s blockade. The same with Britian vs. Napoleonic Europe or Britain with WW1 era Germany (again during the war).
Tbh the fact that the UN already sees it as occupied makes it easier to justify an actual occupation.