I've seen a few, never been hit by one, but...
I launch a couple of fish at a merchant behind me, and scurry away from the one bearing down on me. I switch to external view and see two wakes, one headed for the target, the other one making a circle.
To flank and donwards I go. I watch as the torpedo runs around and around, and then I start thinking "How long will it run? :hmm: And how long until the other ship gets here?"
The straight running torp hit it's target, and the circle runner just did it's lazy little cruise until the other merchant sailed right into the path of the torpedo. It was even nice enough to sink for me.
Maybe it was just the American version of pattern running fish?