I can't look at the battle report but the units engaged in I think were matched up mostly 1 to 1 so the reason why there weren't adjacent units available was by the randomness in which it assigns people to fight which is annoying. it doesn't need to maximal a cavalry charge but ensure that it is a real one without overkill when there is no overkill going on any where else in the battle line. The reason why this should be allowed is because cavalry have the unique ability where their first attack is extra strong(maybe besides SF). If an archer units first volley was extra strong, then yeah it would be frustrating it they were dumb enough to aim at the smallest group of units. If the cavalry couldn't do a real charge it would be better to wait then to waste it because then they get chewed up in the normal melee.
Yes, it would be, if the intent of the battle code was to attempt to maximise the cavalry charge in all cases by reducing the chance of overkill. I'm not sure that is the intent, nor am I sure that with the current state of the battle code that this change wouldn't break 100 other things. If you want a cavalry charge to not suffer from overkill, position them so they charge before the infantry engage the enemy.
