One of two causes.
1) Air bubbles in the lines/caliper. Most bike have a fluid reservoir at the lever where air bubbles tend to migrate, while in the reservoir they are harmless. Flipping the bike upside down and pulling the lever (even a tiny amount), can let those move into the lines/caliper.
A properly bleed brake system can be flipped upside down, but if it's not perfect you get issues.
2) Pulling the lever without a rotor or spacer in the caliper. This causes the pistons to over-extend, and not be centered properly. If the pistons extend too far they can actually leak fluid, leading to major braking issues. If there's fluid on caliper, its probably this issue.
The fix: Bleed the brakes.