If I bait the trap but an AI unit "sees" my army going into the woods would they still attack, or do I have to hide them while they're not looking?

Will the AI go for this on all difficulty levels (I'm playing H/H)?

How did you lose an ambush? I was under the impression that the ambushed army doesn't get to deploy, they're just in a long column and you start on both their flanks? That is how ambush is different from regular battle right?