MTW never had to. It's unfamiliar with things like Phalanxes, and if you flank Chivalric Sergeants or Swiss Pikemen, the effect is no different from flanking Chivalric Men At Arms or even Chivalric Knights (remember Cavalry/Infantry doesnt matter in MTW engine), if their morale levels were equal.
Um. yes it did. Cavalry always gave infantry a morale and attack penalty. Spearmen are MTW phalanxes and the AI was good at lining them up and keeping them together.