That's my read as well. Since he wrote that mercenaries are unreliable compared to standing armies, since their allegiance can be bought, this ability is illustrative of that. Either by using a city state's military after their own suzerain in a surprise attack or perhaps even buying them out from an active military campaign against him.I consider this is a metaphor about bribing them and prevent the enemy action via those CSs.
Definitely very gamey depiction of him, but I think having him be Machiavelli's the Prince: The Leader does make sense design wise.