As I understand it, the "no defense set" function that steps in to automate defense-setting only works when NO defense is set.
I does not work, IIUC, when someone sets a partial defense and leaves certain slots or territories empty.
This is simply the worst case of that - when the opponent sets only a single squad (in this case a fleet) and leaves all other slots empty. Actually, I suppose this is even worse than setting a single toon-squad, because there is no GA quest that you can advance against opposing fleets. This is literally the worst possible case of limited-defense.
I'm really sorry you got hurt by this, but I think the defense-autopopulate feature is probably working both as written and as intended.
Best of luck next time.