[Fantomen]

Retreating and fleeing works exactly the same, randomized between the friendly provinces. If there is only one province all successfully retreated units go there, if there is no province all units die.

In this case, they probably died for some reason other than the retreat mechanic.

Edit: ninjad by the gentlemen above. Like Corinthian says the dreaded replay bug is probably the answer. Meaning that the battle replay does not reflect the real battle fought. Unfortunately this is not uncommon.

Also, turn files are better than videos. We all have the client and that way we can examine the actual event and even run a debug on it if it turns out to be some new major bug involved. (but in this case I'm 99.99% sure that it's either the replay bug or you missed something that explains it)