Basically the two ships are clipping through each other.
This came as quite a surprise to be honest.
That has happened to me sooooo many times XD.
For some reason when a ship is heavily damaged, it becomes a nonentity. Ramming into it causes the ship to merge and clip into other things.
i have encounter this too but not in awhile, also just as a side note, madking321 the proper place to report bugs is in the Suggestions & Support page of the forum.
I have not been on the forums much since my arrival in 2014.