Though it's not that hard to tell when there's a single guy left in a unit and when there's a huge one. Why? Well, let's say that different nobles do in fact carry different banners in addition to the ones that they have for their armies. Because, you know, nobles are vain. And, you know...This is a game. Let's not be so nitpicky about ultrarealism when it makes for a better game experience otherwise. Otherwise you might want to go outside and join some Medieval re-enacting company or something...Or move to some tourist town that has a Medieval theme, because you'd sure as all heck be taking the whole low fantasy Medieval analogue *game* a bit too seriously, lol.
Ok, anyway, so the point is you CAN in fact tell whose unit is whose (No freaking duh, why else do you have the reports saying so? Ok, I bet someone like Indirik and/or Anaris and/or the big names will definitely have something to say about how it's a bunch of scribes observing from afar, or something else, whatever, I don't care.)
And then, unless your guys are colorblind, or blind, or really nearsighted (All of which are separate problems in themselves) then your cavalry can see who has the big ass unit and who is the Spartan fighting as the last man, and direct their charge accordingly. Yeah, sure, they can't steer too precisely, but they can aim at a general area.
Also, 5 or so guys standing in the path of charging horses that are really targetting the big ass unit behind them aren't going to stop the horses. Not sure if we recall that these warhorses are really powerful and can just stomp over silly footmen. Apparently not the case in BM lol. Infantry are fitted with armor made of superdense polyalloys that would put Master Chief's armor to shame.