It worked exactly as it should.
There were only 2 companions left, and both companions were wounded. It does not say "Discard x Orcs to make the free peoples player place x wounds on companions".
If you discard 1 orc, the free people's player chooses which companion to wound.
If you discard 2 orcs, the free people's player chooses which 2 companions to wound.
If you discard 3 orcs, the free people's player chooses which 3 companions to wound.
In this case, you discarded 3 orcs. There were only 2 companions left, so per the rules, the client performed as much of the action as it could and ignored the rest.
If there had been a third companion out there, they would have had to have been wounded as well, but since there wasn't the third wound wasn't placed.