We're seeing a situation where the REST API is reporting that a retweet has been favorited when it really hasn't.
The way to reproduce this appears to be:
From USER1:
- Favorite a tweet by USER3.
- Retweet that same tweet.
USER2 follows USER1, but not USER3.
USER2 fetches his timeline from the REST API and it returns the retweeted tweet, but it is marked favorited:true on both the wrapper status and the retweeted_status objects - except that it shouldn't be. The website shows that USER2 never favorited the retweeted tweet, but the REST API thinks otherwise.
This also can happen to non-retweets in the present day.
Updates
Most instances of this bug were resolved in May 2011. There remain a few edge cases where the phantom favorites continue to pop up.
The most recent reports indicate that tweets as well as retweets are subject to this bug.