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The phrase "a bit of understatement" is correct and usable in written English.
It can be used when describing a situation where someone is downplaying or minimizing the significance of something.
Example: "Saying that the storm was 'a bit of understatement' would be an enormous understatement itself, as it caused widespread devastation."
Alternatives: "a slight understatement" or "somewhat of an understatement".
Exact(13)
That was a bit of understatement.
"It was a great fight," said Henin, 27, in a bit of understatement.
"We've been dealing with some very big issues," he said with a bit of understatement.
"I recognized the breadth of the problem," he said with a bit of understatement.
"Things are going well," Frankel said in a bit of understatement.
"When people lose control, it's not pleasant to watch," said Ms. Horrocks, in a bit of understatement.
Similar(47)
It's a bit of an understatement.
That may be a bit of an understatement.
It seems like a bit of an understatement, this.
"To say she's a Chelsea girl is a bit of an understatement.
Describing Moxie as "not a mega-brand" is a bit of an understatement.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com