If the unit has the misfortune to suffer more wounds than it has models in the Danger Zone, then the remaining wounds are 'lapped round' and start hitting the majority type again. For example, if the Black Templars had suffered fourteen wounds, six would go on the Neophytes as they are in the majority, four on the Initiates and then the remaining four wounds would be resolved on the Neophytes. As with all attacks, the results of each Initiative step are resolved before moving on to the next, so the majority type of armour for the unit could change through the phase as casualties occur. For example, if the squad above had now been reduced to two Initiates and two Neophytes, if it suffers more wounds in the next Initiative step then they could go to the Initiates or the Neophytes first at the option of the owning player.
More Attacks than Models
Source: 3rd-A-Palooza (3.5) Rulebook v1.4, p. 22