Hi Jim,
I saw your question to Barry and I'm a bit confused also........
On P23 under the heading MORALE the first line say's "Cavalry test for routing friendly infantry, but ignore routing friendly cavalry and gunners" no mention of 12".
In the "TESTING INFANTRY MORALE" it has a separate circumstance for Friend's are in rout within 12" and Seeing friend's destroyed within 12".
On P24 in the "CAVALRY MORALE" it has the Seeing friend's destroyed within 12", but not the Friend's are in rout within 12".
I think this a mistake and another thing left out of the rules when they went to print.
So I think they Rout if they fail their test.
Ray.