This would be particularly handy when auto-loading a citation and a date comes in looking like "2019-01", translating that to something like "January 2019"—or at any rate something the citation templates recognise—would be very nice!
I've tested the Citoid service with various books and articles, and I was unable to reproduce this issue. I think the Citoid service has recently improved and now returns all dates in the YYYY-MM-DD format, which I believe is understood by all templates and is becoming standard.
If you believe this issue persists, please reopen it and share an IBAN or OCLC to reproduce it. Thanks!