Question: Infantry getting slaughtered inside their APC by small-arms fire

[Mobhack]

You were assaulted by the Japanese infantry that you "brushed past at 1 hex", i.e. at infantry assault range of 1 hex or less.

Infantry A/T Assault is NOT just firing - it can involve the defending passengers in a melee around the carrier vehicle. So yes, they can be killed separately from the carrier vehicle (or survive while the carrier does not).

This is "Steel Panthers 101" basic stuff.

Andy