#2 - Sept. 8, 2011, 11:23 p.m.
All items of rarity Magic and up have a very small chance to salvage into a material one rarity above it. For example, Magic (blue) items have a very small chance to salvage into a Rare (yellow) material.
This mechanic is not a bug nor is the tooltip. The chance for this to happen is too small to warrant a longer tooltip.