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During German turn of December 1941 I noticed that a number of my units had been downgraded to from 4-3 to 1-1. All have plentiful supply from Rostov at the bottom of the picture but they have chosen to be supplied from Vorosholivgrad at the top of the picture which has been cut off from the rail net. If units can trace from their choice of a close (but empty) grain silo or an almost equidistant full warehouse why would they choose to go hungry?

Thats the general rule of how the supply works.
This is going to encourage player to keep his supply lines in good shape and to defense them.

Also, there is a one turn in delay for refresh.
Display shows where supply was coming from LAST turn.

So this turn is correct. It should switch next turn to show from Rostov unless supply source of Voro is closer.

The enemy zone of control is causing the supply lines to use different hexes and different terrain.

You can count them. I think the manual explains supply pretty well and the reduction in supply from the source for every hex.