When clicking on the option "Gift a unit" in a City State menu, the units you can gift are highlighted with a yellow hexagon arond their tiles. If a military and a civilian unit are on the same tile, the tile is correctly highlighted but, if you click on it, nothing happens.
This bug is a minor one. You can always move the military unit to another tile before gifting it.
This bug is a minor one. You can always move the military unit to another tile before gifting it.