The way I always imagined ambushing working like is that you have an option on the overland map to chose to "set up ambush". Depending on the terrain (better in woods, worse in plains) and your relevant party skill level, you become invisible on the overland map. An enemy lord then walks by, and depending on their scouting skills, they will reveal you when they get closer. You would then have X amount of time from when you start to move to start a battle with the lord and have the best starting position in the battle, perhaps having your archers place in good flanking positions for cross-fire. The time you have to move to engage to get the "ambush" benefit depends on how long the time you spent on setting up the ambush before being detected, this would prevent anyone from clicking "set up ambush" right before a lord chase and reaches you.
Bloody shame they decided to move away from ambushing tactics. I'm honestly not sure what purpose Battania serves other than being an early punching bag, as I imagined Battanian lords all starting with good ambushing skills.
Edit, I just want to say that I disagree with faction-specific abilities. Those should be relegated to skills. I would much more prefer "faction temperament" that makes a faction's lord lean towards specific play styles and skill distribution.