Played this scenario today, and eked out a Spanish win (7-5) with the most exceptional performance of the Spanish cavalry I've ever seen. Only one LC fled, and that was after wreaking havoc on the French cavalry. Despite thinking that the cavalry were best used by attacking and have them flee offboard (for no banner loss), they fought like lions on horseback. Every single banner that Spanish took was taken by the Spanish/Portuguese cavalry, with a single assist from a combined arms artillery. They paid a price, 4 dead cavalry.
A question that I entertained by was never relevant.
What happens to a leader with a Spanish cavalry if it flees?
Glory is fleeting, but obscurity is forever.