Ok, so I took a deeper look at Ace's battle logs, and edited them down to the relevant sections concerning retreat decision making.
Edit: Captain_O. It's almost as if Davidson, TN is simply unevaluated. See below.
Ace Test 1:
At the end of round 0, EJ tries to retreat, but is unsuccessful.
At the end of round 1, EJ is routed, the retreat is automatic... and then there is this interesting entry.
17:14:08 (Reporting) Side: 1000002 Confederate States of America is routing!
17:14:08 (Reporting) Group 1006326 E. Johnson' Corps is routed, retreat is automatic
17:14:08 (Reporting) E. Johnson' Corps succeeded in retreating
17:14:08 (Reporting) E. Johnson' Corps will take 46 hits while retreating (though no hits can be done on round 0)
17:14:08 (Reporting) Retreat Path Inspecting 2327 Dover Bend
17:14:08 (Reporting) Can't move into, discarded
17:14:08 (Reporting) Retreat Path Inspecting 2316 Middle Cumberland River
17:14:08 (Reporting) Can't move into, discarded
17:14:08 (Reporting) Retreat Path Inspecting 580 Sumner, TN
17:14:08 (Reporting) Retreat Path Inspecting 556 Warren, KY
17:14:08 (Reporting) Retreat Path Inspecting 547 Muhlenburg, KY
17:14:08 (Reporting) Retreat Path Inspecting 543 Trigg, KY
17:14:08 (Reporting) Retreat Path Inspecting 2313 Donelson Narrows
17:14:08 (Reporting) Can't move into, discarded
17:14:08 (Reporting) Retreat Path Inspecting 578 Stewart, TN
17:14:08 (Reporting) Retreat Path Inspecting 596 Davidson, TN
17:14:08 (Reporting) Retreat Path Inspecting 625 Humphreys, TN
17:14:08 (Reporting) E. Johnson' Corps managed a tactical retreat, but has no retreat possibilities in another region, staying in battle in Defensive posture
17:14:08 (Reporting) Commit Chance 1005411 L. Wallace' Corps 55 %, Rolled: 64 Not committed
The retreat path Inspections seem to be not happening (except to the river regions, who are discarded.) So E.J. stays in place. Wallace fails to commit, so the battle ends.
Test Battle 2
Largely same as above, except at round 0 E.J. seems to succeed in retreating. The "retreat path inspecting lines" are exactly the same as in Test 1 Round 1, and again the conclusion is "E. Johnson' Corps managed a tactical retreat, but has no retreat possibilities in another region, staying in battle in Defensive posture."
At the end of round 1, there is a different retreat log:
17:18:30 (Reporting) Battle in 579 Montgomery, TN Day: 1 Round: 2
17:18:30 (Reporting) 1005411 L. Wallace' Corps new target is 1006326 E. Johnson' Corps
17:18:30 (Reporting) Commit Chance 1008163 9. CSA Detachment 30 %, Rolled: 82 Not commited
17:18:30 (Reporting) Checking combat stance for United States of America in region 579 Montgomery, TN
17:18:30 (Reporting) Auto retreat triggered, TotalHits remaining: 719 Avg Cohesion%: 72 Base AutoRet%: 20 Hits taken: 203
17:18:30 (Reporting) Auto retreat: Hits received altered by the CiC's ROE retreat will 1003424 Lewis L. Wallace 80
17:18:30 (Reporting) L. Wallace' Corps There is no enemy on offensive, no need to retreat outside region.
17:18:30 (Reporting) Checking combat stance for Confederate States of America in region 579 Montgomery, TN
17:18:30 (Reporting) Auto retreat triggered, TotalHits remaining: 813 Avg Cohesion%: 48 Base AutoRet%: 20 Hits taken: 211
17:18:30 (Reporting) Auto retreat: Hits received altered by the CiC's ROE retreat will 1007249 Edward Johnson 100
17:18:30 (Reporting) 9. CSA Detachment There is no enemy on offensive, no need to retreat outside region.
17:18:30 (Reporting) E. Johnson' Corps There is no enemy on offensive, no need to retreat outside region.
17:18:30 (Reporting) Group E. Johnson' Corps has failed to retreat
17:18:30 (Reporting) 1005411 L. Wallace' Corps new target is 1006326 E. Johnson' Corps
17:18:30 (Reporting) Commit Chance 1008163 9. CSA Detachment 15 %, Rolled: 37 Not commited
No enemy on offensive, no need to retreat outside region. No retreat happens, yet the forces continue to engage. The battle ends after round 5 (at the end of the day)
What is interesting, is that later in the log E.J. retreats on day 13 from Humpharies TN:
17:18:30 (Reporting) Checking combat stance for Confederate States of America in region 625 Humphreys, TN
17:18:30 (Reporting) Side: 1000002 Confederate States of America is routing!
17:18:30 (Reporting) Group 1006326 E. Johnson' Corps is routed, retreat is automatic
17:18:30 (Reporting) E. Johnson' Corps succeeded in retreating
17:18:30 (Reporting) E. Johnson' Corps will take 25 hits while retreating (though no hits can be done on round 0)
17:18:30 (Reporting) Retreat Path Inspecting 594 Perry, TN
17:18:30 (Reporting) Initial value from MC: 100
17:18:30 (Reporting) Value after move cost: 100
17:18:30 (Reporting) Value after structures ownership: 100
17:18:30 (Reporting) Value after enemy presence: 100
17:18:30 (Reporting) Value after friendly presence: 100
17:18:30 (Reporting) Value after bottleneckness / Passage hub : 160
17:18:30 (Reporting) Not coming from this region, no change
17:18:30 (Reporting) ---> New best region: 594 Perry, TN Value: 160
17:18:30 (Reporting) Retreat Path Inspecting 2319 Waverly Run
17:18:30 (Reporting) Can't move into, discarded
17:18:30 (Reporting) Retreat Path Inspecting 578 Stewart, TN
17:18:30 (Reporting) Initial value from MC: 0
17:18:30 (Reporting) Value after move cost: 0
17:18:30 (Reporting) Value after structures ownership: 0
17:18:30 (Reporting) Value after enemy presence: 0
17:18:30 (Reporting) Value after friendly presence: 0
17:18:30 (Reporting) Value after bottleneckness / Passage hub : 0
17:18:30 (Reporting) Not coming from this region, no change
17:18:30 (Reporting) Retreat Path Inspecting 2327 Dover Bend
17:18:30 (Reporting) Can't move into, discarded
17:18:30 (Reporting) Retreat Path Inspecting 2316 Middle Cumberland River
17:18:30 (Reporting) Can't move into, discarded
17:18:30 (Reporting) Retreat Path Inspecting 596 Davidson, TN
17:18:30 (Reporting) Initial value from MC: 100
17:18:30 (Reporting) Value after move cost: 100
17:18:30 (Reporting) Value after structures ownership: 220
17:18:30 (Reporting) Value after enemy presence: 220
17:18:30 (Reporting) Value after friendly presence: 788
17:18:30 (Reporting) Value after bottleneckness / Passage hub : 1291
17:18:30 (Reporting) Not coming from this region, no change
17:18:30 (Reporting) ---> New best region: 596 Davidson, TN Value: 1291
17:18:30 (Reporting) Retreat Path Inspecting 595 Hickman, TN
17:18:30 (Reporting) Initial value from MC: 100
17:18:30 (Reporting) Value after move cost: 100
17:18:30 (Reporting) Value after structures ownership: 100
17:18:30 (Reporting) Value after enemy presence: 100
17:18:30 (Reporting) Value after friendly presence: 112
17:18:30 (Reporting) Value after bottleneckness / Passage hub : 198
17:18:30 (Reporting) Not coming from this region, no change
17:18:30 (Reporting) Retreat Path Inspecting 577 Henry, TN
17:18:30 (Reporting) Initial value from MC: 46
17:18:30 (Reporting) Value after move cost: 46
17:18:30 (Reporting) Value after structures ownership: 51
17:18:30 (Reporting) Value after enemy presence: 51
17:18:30 (Reporting) Value after friendly presence: 63
17:18:30 (Reporting) Value after bottleneckness / Passage hub : 131
17:18:30 (Reporting) Not coming from this region, no change
17:18:30 (Reporting) Retreat Path Inspecting 579 Montgomery, TN
17:18:30 (Reporting) Initial value from MC: 0
17:18:30 (Reporting) Value after move cost: 0
17:18:30 (Reporting) Value after structures ownership: 0
17:18:30 (Reporting) Value after enemy presence: -292
17:18:30 (Reporting) Value after friendly presence: -284
17:18:30 (Reporting) Value after bottleneckness / Passage hub : -284
17:18:30 (Reporting) Coming from this region but negative value, no change
17:18:30 (Reporting) Retreat Path Inspecting 592 Decatur, TN
17:18:30 (Reporting) Initial value from MC: 100
17:18:30 (Reporting) Value after move cost: 100
17:18:30 (Reporting) Value after structures ownership: 105
17:18:30 (Reporting) Value after enemy presence: 105
17:18:30 (Reporting) Value after friendly presence: 105
17:18:30 (Reporting) Value after bottleneckness / Passage hub : 179
17:18:30 (Reporting) Not coming from this region, no change
17:18:30 (Reporting) Region picked : 596 Davidson, TN
17:18:30 (Reporting) E. Johnson' Corps is retreating toward Davidson, TN
17:18:30 (Reporting) Group E. Johnson' Corps has retreated
This quote illustrates a log that is showing a full Retreat Path Inspection...that for some reason was not happening in Montgomery, TN.
Test 3 log:
Similar to the others, except that after round 0, the CSA seems to have the upper hand in power and does not try to retreat. Wallace seems to stick in the battle, even after routing, because of the "There is no enemy on offensive, no need to retreat outside region." message. But of course, the engagement keeps happening. It should be noted that there is a battle in Fayetteville AR, which has a fully delineated Retreat Path Inspection.
Conclusion:
There seem to be two odd things going on here. First, the retreat path inspection calculation didn't seem to fully fire for EJ in Montgomery, TN (but did fire in Humphreys, TN, and Fayetteville AR.) I wonder if the fact that Montgomery was 100% US controlled, and a river separated EJ from 100% CSA controlled zones had something to do with it. (Pocus did beef up the "bottleneckness" importance, and mentioned getting stuck surrounded by water would be a bad deal).
Second, the stacks are thinking that there are no offensive enemy stacks present, so there is no need to leave the region. I don't know if this is because the stances change, for some reason, after the retreat calculation is carried out...
Anyway, those are my thoughts... hope it helps. If you want to look at the edited logs, be my guest.