The following gives an output where the second eqaution writes over the equation number
\documentclass{report}
\usepackage{amssymb,amsmath}
\usepackage{breqn}
\begin{document}
\begin{dgroup}
\begin{dmath}
a = a
\end{dmath}
\begin{dmath}
a = a +a+a+a+ b+b+b+b+b+b+b+b+b+b+b+b+b+a+a+a
\end{dmath}
\end{dgroup}
\end{document}
Using just
\begin{dmath}
a = a +a+a+a+ b+b+b+b+b+b+b+b+b+b+b+b+b+a+a+a
\end{dmath}
without the dgroup environment leads to correct output.
It looks like this ((1a) and (1.b) are in the dgroup environment whereas (2) is not):

Did I make a mistake or is this a bug? What is the correct way to handle this situation?

breqnis quite unfinished so I wouldn't use it if I was you. Neither Michael Downes (before he passsed away) or Morten Høgholm (before we left the LaTeX community) gotbreqnfully working. – Svend Tveskæg Oct 28 '13 at 01:43