I move to surround two adjacent units ...

[Greg J]

... and on the same turn attack both, but with differing units (and maybe on different impulses).

The problem is that the first unit I attack is forced to retreat, and retreats to the adjacent hex where it shatters. I was expecting it to surrender.

The second unit always surrenders dutifully (if forced to retreat), why not the first?

[RickyB]

Greg,

It is an issue of being able to determine surrounded status. Any time a unit retreats and does not reach an open hex within a certain number of hexes, it shatters. As it is really difficult to determine if the unit is surrounded resulting in the shatter or it just runs out of hexes and thus shatters, the game treats them the same either way. However, the losses are fairly high from this - much higher than they used to be when the Soviets that shattered on turn 1 returned with 60% or more of their tanks on average. It could probably be done better, but probably will not be.