Sorry, I misspoke.
1. EMBARKED a UK land unit (land unit from land to fleet) on a French port
2. Moved a french fleet to escort the EMBARKED UK unit
3. When the fleets merged, the embarked UK unit disappeared, leaving only the French fleet
I did the same thing with another unit. Same scenario, just a different French fleet, different French port, different UK land unit. This one worked fine, no issues. There was the difference in that this fleet was set to repair/upgrade, while the broken fleet was set to do NOT repair/upgrade.
This happened using the open beta combined with update v1.00.04, so this was probably not the case. The hex was 148,75. A game reload fixed the issue, but it's a bug nonetheless (unless I borked the open beta install).