Prety much what it says in the title, I'll fire a torpedo at something and it decides it wants to spin in circles instead of going in a straight line. Observed primarily with guided atropos torpedoes but that’s probably because I’ve spent most of my time using them, I’m fairly sure I’ve seen it with unguided hammer torpedoes as well (if anything worse as they don’t have guidance to try to stop the spinning and hit something).
Off the top of my head I would suggest it occurs either when firing at point blank range or when the firing ship is moving perpendicular to the torpedo’s firing vector; I’ll try to remember get a screenshot when I next see it.