Iirc, that was something FXS changed early on in the game's life cycle. There was an exploit where you could disband damaged units on the verge of losing for gold equal to half the production cost. The gold could then be used towards most of the cost of purchasing a brand new, undamaged unit.
Yeah, plus just disbanding them to free up the terrain plot, or to avoid giving the AI a free combat win, or giving Monty a free builder. It's the sort of thing that probably doesn't need to be in the game anymore, but it's only a small issue.
As to the point before, I do think there needs to be better ways to handle power vs unit allocations. There's definitely times where I wish I could scream at the game "No, turn that oil plant off for the next 10 turns, I need my artillery to heal." without technically changing the plant to something else or doing some other trick.