The trick is not losing your supplies in the first place. In the case of Bataan good order was maintained and they retreated into a natural fort that couldn't be out flanked. Their front line got to defend against those attacking from the front.
That's correct, but they hadn't access to supplies. The rule in the game is that if you can't path to a supply source in under 100 MP, you're isolated (doesn't require an actual encirclement). Bataan peninsula was not a supply source (they were low on supplies from day 1), so from the game's rules they should be a wash-up in 1 or 2 weeks. Instead, as you perfectly explained, in real life it's not lack of access to a supply source that makes troops a wash-up.
This is from James Dunningan, "How to Make War", p. 460. "A nonmechanized army requires only 15 to 30 pounds of supply per man per day. Every 1,000 tons of supply keeps 100,000 men in combat for a day. If one rail or road enters an area occupied by 100,000 troops, it must be cut for more than 95 percent of the time to have any effect. And it must be cut for a sustained period, because military forces stockpile supplies when they have a chance... Units without supplies can still fight, but at greater cost in casualties. As the Chinese in Korea and the North Vietnamese in Vietnam demonstrated, it is possible to take more casualties in lieu of using ammunition and still stand off a better-supplied force. In Korea it was found that with twice the manpower taking twice the casualties, the Chinese were able to match better-armed and better-supplied UN units... The key point is that adverse effects of reduced or no supply are gradual. Troops can continue to operate in those conditions for weeks or months. How is this so? Call it the Use What You Got rule of supply: when troops are well supplied they profligate. When times are lean so are expenditures. When supply dries out for any reason, expedient methods are found to get by with less. History is full of examples."
I think the most immediate factor in an encirclement is really morale.
I also think the keyword here is "nonmechanized" army.
The "Use What You Got" rule will only go so far for tanks, APCs, SP Arty, ...
One thing that I miss from other games systems is the attack bonuses attributed to attaching a unit from multiple hex-sides.
Perhaps this is somewhat abstracted to the out-of-supply mechanics ?