This bug seems to be fixed for the standard sovereigns. I haven't seen them doing this in 1.00. But it looks like bug still exists for custom AI sovereigns.
Its not fixed for standard sovereigns in 1.004.
And its related to reloading a game. (Savegame before demanding surrender here.)
Here we have Markinn with 11 leather greaves after he surrendered to me:

and here we have Markinn with 12 leather greaves, after reloading, pressing end turn, and then demanding surrender:
