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I observed a game today where some Orc bikers charged a Tau suit squad. 2 bikes, one of which had a wound from the previous turn's shooting. The bikes charged in, OW missed, and combat commenced. Bikes chopped away, caused a wound. Suits struck back and caused a wound. Since both bikes were in b2b with the suits, the Orc player put in on the unwounded bike. Was this legal?
I know that 5e required wounded models to be removed, but this particular terminology isn't used in 6e BRB (that I'm aware of).
The line in question is on p25: "Once a model has a Wound allocated to it, you must continue to allocated Wounds to it until it is either removed from play or" blah blah blah. This is in the "Allocating Wounds," assaults section, so I thought it might mean that, since the biker's wound was allocated in a previous phase, this new allocation did not count and he could thus put it on either model since they were equidistant. OR the line could mean that, once a model has a wound, it must take ALL the wounds (so long as it is the closest model to the source of the wounds).

So?

Once a model is determined to be the closest it is the closest model for the rest of the shooting attack or initiative step. This means (in your situation) that since both nobz were in base contact, the ork player gets to choose which is the closest model and that model takes all the wounds for the given Init step.

TL;DR, what the Ork player did was legal.

That line on page 25 refers to during that phase from the context, also wound allocation =/= suffering a wound. You pick your closest model and he's the closest until he's dead, that's all that line is about.

So if I start taking Ap3 wounds in combat on my terminator WG in a squad of mixed armoured WG I cannot switch to a power armour dude when some ID wounds are coming in and I want the terminator not to take them.

The wounded Ork Nob could also 'look out sir' to give the wound to the unwounded Nob. But I play the wounded nob takes the next wound, no choice if they are both the same distance away.

 Sleg wrote:
The wounded Ork Nob could also 'look out sir' to give the wound to the unwounded Nob. But I play the wounded nob takes the next wound, no choice if they are both the same distance away.

In a unit of Nobz or Nobz Bikers, they are no longer Characters (BRB FAQ):

Reference Section – Profile, Codex: Orks, Nob.
Change unit type to Infantry and add the following
Designers Note: Wolf Guard, Nobz, Nobz Warbikers, and Crisis Shas’vre that lead a unit (for example an Ork Nob leading Ork Boyz, a Wolf Guard leading Grey Hunters) have (Character) added to their unit type.

Then the wounded Nob would take the next wound. I also play that not in melee, and the shot could hit the wounded (LOS), no matter where in the unit the wounded is placed they take the next wound - IC's not included.

 Sleg wrote:
Then the wounded Nob would take the next wound. I also play that not in melee, and the shot could hit the wounded (LOS), no matter where in the unit the wounded is placed they take the next wound - IC's not included.

Yes but that isn't the rules.
The rules are closest outwords, if the wounded model is at the very back of a 30 man ork blob there are 30 boys that need to be taking wounds first, even in combat.

 Sleg wrote:
Then the wounded Nob would take the next wound. I also play that not in melee, and the shot could hit the wounded (LOS), no matter where in the unit the wounded is placed they take the next wound - IC's not included.

Clearly that's not how the rules make it happen, and I would really not want to play with that house rule. It's a rather bad nerf to units with multiple models that have multiple wounds as it totally disallows me now to rotate my guys around during movement to protect the wounded ones. My Warriors are squishy enough as is, they don't need this added on top.

This actually happens per initiative step, not per Assault Phase. Page 25 right column, 1st bullet point.