You're attacking a heavily defended AI city. Their defense bonus is 60% or more, and many units (e.g. archers) are fortified inside. The drill here is to bombard with your catapults till the defense bonus for the city goes to zero, then attack with the catapults to cause collateral damage (likely losing nearly all of them) and then attack the units inside, again losing some of your own units and having others considerably hurt.

So here I was, going through this drill, and paying no attention to the Axman the AI has fortified on a hill right next to the city. It was a close battle, but at last I take the city with my last unit, so it has only one defender till the next turn.

But guess what? That axman comes charging down the hill and takes the city back --and-- the defense bonus for the city immediately pops back up to 60%. Now I am left with a badly wounded set of units with no catapults left sitting outside an AI city with a fresh powerful defender and 60% bonus.

So had to pull back, build more cats, heal units, and come in and try again. This time I made sure to knock out that Axman.

Later in this same game, I saw one AI do this same thing to another AI (my ally as it happened.) Here I had just one cav in the area pillaging and hoping that things might work out so that the ally AI does all the work and my cav unit gets the glory by taking the city at the end of the seige. Didn't happen. Ally took the city with a weakened last unit, enemy took it back and city defense went back up way high. Silly ally AI then charged the city with his wounded units and got wiped out. And my cav rode off into the sunset.

Yeah, it is likely a bug. Consider that it takes you several turns to bombard the defenses down to zero, but the AI builds all the walls, etc back instantly.