As a regular union pbm player I have just seen this event occur for the first time.
I am very surprised that this has happened as the csa player earlier in the game triggered the csa invasion event and the subsequent shift in kentucky loyalty to the union. Up to that point I avoided attacking any kentucky cities or csa kentucky militia.
Suddenly and for no apparent reason kentucky secedes union and of course the union loyalty % collapses in all the local regions. This seems wrong as there is nothing the union player can do to avoid it. Have I missed something - how does this event trigger and is it linked to the earlier csa invades event ?