I had a 6-unit army in the field, one square away from my town.  They happen to have a movement waypoint set so that they would have entered the city next turn.  However, Enemy party attacks, zoom to tactical.  Only 1 of my 6 units is on the field; battle lost of course.  Battle wrap up screen indicates all 6 units are dead!  However, back to the strategic map, and the other 5 of the 6 units are safely back in the city.  

edit:  Added strangeness.  I move out the 5 units so as to pick off the remaining enemy army, but once they're out of the city I can't control them; their portrait doesn't appear on the Units UI dropdown, I can't click on them, although they appear on the map.  After END TURN, they're gone, as if really dead.