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The situation: December, 1792:
His Royal Highness, George III inquires as to the reasons for the docking of the Austrian Merchant fleet at the Royal Naval Yard at Kent. While November & December (1792) are not the most hospitable months to plow the English Channel, this uninvited intrusion must be explained....

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So what is going on here? I have combed the manual (new & old) plus Raleigh's Tips and I can't find an explanation. What am I missing here???????

Nstates can still walk across your nation at any time. But they should also be taking a glory hit if they don't have an agreement with you. Check to see if it's glory is going down at all for violating your neutrality. Otherwise it's probably a bug. Also, be sure you aren't at war with them because through convoluted deals, you can wind up at war with someone and not even know it unless you very carefully read the log every turn.

Thanks mate.  I suspect that they were actually just refitting during the winter months.  We were allies and I believe the rule book says something about ships recovering strength points while in ports (it doesn't say they have to be the ships owner's port).
 
I have to go with that since my cousins the Prussians did it too a little later on.
 
Thanks for your help.