I've recently started playing the 2nd Edition of General de Brigade and during our second game this evening an unusual situation arose which I am hoping you can help resolve (I will also be asking this question on the GdB forum).
This is a picture of the wider context of the game
And this is a zoomed in picture of the confusing situation
As the cavalry charged the square they passed their morale test to close but the square scored a modified morale result of 4 which corresponded to a "Retreat" move. We weren't really sure how to deal with this and I'm hoping someone can offer clarification. The issue arose because the rule book states that upon retreating units "will inter-penetrate other friendly units during the first half of the initial retreat move (not applicable to squares)". This left us unsure as to whether squares retreat at all or whether they just can't inter-penetrate. Any help would be much appreciated!
Ultimately we decided that the square retreated a full move back and became unformed. This allowed the British cavalry to continue their charge and contact the French column in the flank which resulted in that unit breaking.