It works as you describe in your memory. Certain units react in different ways...
Ships - Can be damaged and sent to port or sunk
Cannon - Damaged first, then destroyed, no chance for repair
Dragoons (mounted braves)- Defeat makes them Soldiers
Soldiers (armed braves)- Defeat makes them colonists
Colonists - Defeat results in their capture
Braves - Eliminated on defeat
Scouts - Defeat makes the colonists
No other results I can recall. Units never simply disappear unless you are talking REF, and then theres all kinds of new scenarios, but I am taking the liberty of assuming you are not talking about that.
Now that i just said that, the other instance is actually Indian raids. If you have an armed colonist they can eliminate him outright in some circumstances. If you have no wall, cannon, armed soldier, etc.