From: Combat Information Center
It's called "combat friction". There are any number of reasons why this happens to a unit, and it was purposely built into the game. Random suppression increases, particularly to units that are low in Morale, are Out of Contact with higher HQ, or have witnessed the destruction of a friendly unit.
I once had a Troop Commander unit (the B0 tank of a British Cruiser squadron) in a Core Force develop 99 Suppression between the Deploy phase and Turn 1, resulting in its retreating off the map, in two successive batles. The unit was high Average in EXP and MOR, had no damage, did not "see" any enemy units, was not fired on or barraged, did not see any friendlies destroyed, or suffer any other event that could logically have explained the sudden increase in Suppression, but there it was, running hell-bent for the Retreat flag.
So it's not a "bug", more of a "design feature".