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They are booted out of their current frontline and have no way to get anywhere, so they get teleported home.
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The devs themselves explained it in dev diary 145 (link):
"...Teleporting Armies
“Beam me up Scotty!” General Wolseley exclaimed when he found himself unable to attach to a front in India. And sure enough, two minutes later he was drinking tea with the Queen in Buckingham Palace.
At least that is how it sometimes worked out in our game. Until now!
The issue of teleporting armies comes to be when there’s no valid front available for a formation to go to. This can happen for example when a formation is isolated by neutral territory or the front they were moving towards being pushed into unavailable space.
We’ve always had some fallbacks for missing spline connections for example, which allowed armies to simply march through terrain though there wasn’t really a path defined.
And teleportation was our fallback solution for the worse cases. ..."
We'll see how it will play out in v1.9.