It's all hunky dorey now. I forced them to fight hand to hand and the knives do appear (sure they didn't first time I tried though?).
I think I was also put off by the fact that the bow is in left hand but their right hand is stuck out as if there should be something there, but I tested other umodded bog standard cav archer units and they all look like this (well they do with my lame graphics card anyway)
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