Gibbing happens on the battlefield inevitably, and can happen to any infantry unit. When a gib happens, it blankets the battlefield in blood, teeth, bones, muscles, and organs, as well as chunks such as spines or legs. These don't have a physical effect, but can lower the morale of your men, just as getting BBQed will. According to a TIP, there are 21 different body parts that can come out, and these are best described as a landscape feature.
The other part to this is the blood that comes out when a person is shot, perhaps the quickest way to tell if that shot you heard hit or missed. This isn't much of a problem and won't lower morale, but a well placed shot can KO your unit.
And don't worry if you think the battlefield will be eternally covered with these body remains, it doesn't. A cleanup function kicks in every ten waves to clean bullet holes and body parts.