German armed forces were prohibited from recruiting foreigners so W-SS found this pool very useful.
That's what I said.
The forces you mentioned (Spanish, Croat) were foreign units raised outside Germany, staffed by foreigners but operating under German TO&E to simplify chain of command. a somewhat inapropriate modern analogue would be when small countries contribute troops but oeprate under foreign command, such as some Latin american countries operated under Spain in Iraq.
Maybe somewhat an inappropriate comparison for the Croatians, totally so for the Spaniards, because Spain had not declared war on the Soviet Union. So for all purposes, the Division Azul was a foreign legion of the Wehrmacht, not a foreign unit under tactical control of the Germans but ultimately depending from its country of origin.
If this could be done for the Spaniards, why not for the Volksdeutsche that made up much of the personnel of the early foreign SS units, and why not for the true foreigners, too.
Soviet POWs weren't recruited into armed forces until later
In fact. That's why I wrote "later" in the sentence this seems to be a reply to.
but served in auxillary capacity (Hiwis).
And in a combat, if poor, capacity. IIRC it was the 226. Division in Italy that the Germans called the "Turkmenisch", not without good reason.