When Bounceback can still mean melee

Here's what happened in the Salamanca (Attack on the French left). A Portugese HC unit attacked a French infantry unit which went into square. The French rolled a Bounce Flag forcing the HC to retreat. But because the HC was "behind" the infantry (i.e. between it and the French baseline), the 1 hex retreat back towards the Allied baseline still left the HC in an adjacent hex and I thus allowed it to roll the 1 die attack on the infantry square.

Is this correct? The HC did retreat towards its baseline but the rules state that melee is only allowed if the cavalry "is not eliminated or forced to retreat". Can cavalry retreat and still melee against the square as in the example above?

but the rules state that melee is only allowed if the cavalry "is not eliminated or forced to retreat".

You answered it with the rules. The CAV was forced to retreat AND could retreat, indifferent, that the CAV is still adjacent to the square after retreat, they can´t battle!

I see. The CAV are actually riding around the square, unable to attack. I can understand that.

Thanks for the quick answer.