In the start with RTW the pursing cavalry would keep pausing every time it got near the retreating unit. This was resolved and afterward the cavalry would ride over routers as a block formation... Note though that in RTW the battle animations where abstracted and to fighting individuals did not have to the sync'ed with each other.

There are two issues here I think, and one of them existed in RTW too. The first one is when the routing unit gets very seperated. The persuing unit would (and still does) attack the center of the fleeing unit. Of course with the fleeing unit highly separated then there are actually no individuals is cut down in the center of the unit. This issue is in both versions and always requires some micromanagement to handle. In RTW you could simply pull your pursuers behind the last of the trailing routers and it would work it's way forward taking them out first and sorting out the issue.

The second issue is when there are very few individuals left in the fleeing unit and this issue only occurs for MTW2. I believe the it is due to the requirement that individuals in a unit seek out individual enemies to sync up their animations to fight, plus individual soldiers require significant "personal space" the unit. When there is a single router left you see this pretty clearly. The persuing unit will catch up in good order and at the last moment (at the charge) every individual will change direction to charge directly at the last router. But they all get in each others way and the "personal space" function comes into play forcing the individual cavalry men to move away from each other (still at charge speed) which results is an extreme spreading out of the persuing cavalry unit. Once this happens I believe the router is still within this spread so effectively the units are engaged so the cavalrymen hunt around for targets rather than chasing after the routing unit as a whole.