[Bug] Squad HP recovery problem

I had a squad of swordsmen (8 of them) level up 2x after a battle.  They went from 88 HP to 176 HP.  I took them to a town to heal up and found that the squad only healed up 5hp a turn.  This seems like a bug.  Shouldn't they each heal up 5hp for a total of 40HP for the squad?  Otherwise, I need to wait 16 turns for them to heal up?  This doesn't seem right to me. 

Edit:  I just finished training another squad that I trained as veterans.  They only started out with 80 of the 160 max HP they had.  Is this a bug or how the game is supposed to work?

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