This is a weird misunderstanding of that order. The military order was aimed at military units, naturally. Specifically, the order, despite Western mythological perception, did not allow the execution en mass of retreating conscripts, but, as in the text of the order, was deliberately aimed at the officers responsible for leading these units. It was a panicked reponse to impressive German gains and Stalin's near disbelief that his army was performing so poorly, so it had to be because of cowards!

Anyway, the order was not extended in any way to territory, or the citizens living there. Infact, in a subsequent, and far more infamous order 227, Stalin laments how the occupied citizens moan and lose faith in the Red Army for their setbacks. So if anything Stalin is using the occupied citizens as a way to goad the military into performing better so as to win the respect of the people again in occupied territory.

Regardless, the regime viewed with tremendous suspicion the occupied territories as they may had been Germanized, or worse, nationalist forces there were able to fill in the power vacuum left in the war to advocate and fight for their own independence. These forces, common in Ukraine and Poland, fought the Germans and Russians, and for years after being brought back under the Soviet sphere, lawless countryside wars raged between the independence fighters and the NKVD as they tried to squash these movements.