Unconditional surrender meant that there was no ambiguity as to the precise moment the war ended. This gave all parties to the conflict a much-needed degree of certainty, allowing them to plan for the post-war future. Isolated pockets of resistance would doubtless remain in such a scenario, but they would be easily contained. At the very least, the insistence on unconditional surrender would make it abundantly clear to all concerned what was expected of them, and this was surely its main advantage.

On the downside, the demand for unconditional surrender, at least in the context of the East Asian theater of war, merely served to encourage further resistance. The Japanese felt they had nothing to lose by continuing to fight, even though it was obvious that they could never actually win the war. The Japanese felt they were fighting for their civilization, which they believed was under threat if they capitulated on America's terms. It was only after the United States dropped the atomic bomb on Hiroshima and Nagasaki that the Japanese finally acceded to demands for unconditional surrender. But in the meantime, loss of life on both sides continued to mount.

The major advantage of the Allied policy of accepting only unconditional surrender was that it made the war aims perfectly clear in the eyes of the military and the general populace.  There was no question about how we would know the war was over and therefore no pressure to make peace and end the war.  The disadvantage was that it made the enemy more likely to fight to the bitter end.  The policy made it impossible for the Axis powers to negotiate a surrender.  They knew that anything could happen to them if they surrendered.  Therefore, they were more likely to fight long and hard (as the Japanese notably did), causing more casualties for the Allies.