I've seen this graphic "bug" alot during sieges. Tried doing a little test by setting archers/crossbows on the parapet and firing at troops behind the walls, inside the city/castle.

First there's a feature in the formations that doesn't allow you place troops in a straight line towards the inside of the fortification. This means that most of them will have no line of fire against troops below. But the troops that DO stand on the ledge looking down at the enemy do fire perfectly straight down as they should while the rest just do the indirect fire thing.

Really looks cool to see (some) missile troops shooting straight down into a massed formation and wasting them in droves. So in conclusion, too bad you cant place your troops a little more freely on the walls.