Playing with the latest beta batch (1.06e), I encountered a bug. As the CP, I surrounded two armies, one British and one French, several turns ago. Yet despite their isolation for more than two turns, the armies have yet to disband, as the manual states they should.
The icon on the headquarters icon for the British army indicates that it is isolated, yet the icon on the map is not displaying the isolated indicator, as usually happens with isolated units.
This is the only time this has happened with 1.06e or 1.06D. I have surrounded and isolated other armies, and they were eliminated in the two turns the manual stipulates.
I used CTRL-S to look at the supply sources for the British army, which you can see in the attached screenshot. The surrounded army appears to be drawing supply through my armies, from Belgium. In this game, Belgium voluntarily surrendered back in September '14, with the result that I kept the territories I had conquered at that point but Belgium retained the rest. I don't remember if the message stated anything about who could draw supply from Belgium.
Either way, the surrounded armies should not be able to draw any supply, as my armies are in the way. I have attached a save game.
On a side note, I'd like to state that I am deeply impressed by the amount of work and quick responses you've given, calvinus. I don't think I've ever seen a developer respond so rapidly with fixes in response to user reported issues. I work with software developers, so I know the amount of time and frustration that can go into bug fixing, and I appreciate your dedication.