When a city has a full 9 units, new units built there displace an existing unit, rather than being displaced themselves.
After further play, I have come to prefer this. It means that newer, and therefore likely more advanced, units guard the cities and gain experience, while less-advanced but more-experienced units can be sent to scout or attack. This is particularly effective with an Armsmaster hero: by the time a unit is ejected by a new one, it is likely already Elite.