Retreat is a global state though right? Like Expansion? I.e when you get it in one system, it appears as an active state in all systems?
If so, it's possible the faction was at low influence in multiple systems, and it retreated from a different one?
You're correct that retreat is a universal state. It'll show as active in all systems, even if it only applies to one. So your supposition that the retreat happened in another system is very plausable.