1: Only one Tactician Card (or special rule) increases the attacking Cavalry dice against a INF into square (Break the Square).
(Rectification of my first answer here, because i didn´t remembered the BsS card)
2. And yes, you play this card if the melee is announced, but then the attacked INF may choose to go into square, and this card is lost
Similar card and result is "Battlefield Smoke", because this card negates also all increasing dice cards/rules of the attacker (so these cards are also lost)