[narwan]

Pinned means a unit is unable, or more often unwilling, to move due to the perceived risk of getting hit. These troops have gone for cover, exposing less of themselves but being less effective in firing back too. In a firefight a troopers natural instinct is to stay behind the cover and not move. They'll fire back from behind their cover, but they're not ready to leave it.
They'll have lower accuracy, less shot opportunities and reduced sighting. That last one means they'll react much slower to events around them.

Could it be that there was a second squad in the hex with the retreating squad that you hadn't spotted yet? That could have been the one firing back and not the one retreating. I've seen that happen often enough.