I'm so sick of this "M&B is not realistic game, cause I totally can't pick my nose in-game" attitude.
Okay, it's not fully-totally-mega-hyper-plus-plus realistic. But that doesn't change the fact there's no jumping trees from peak to peak, wielding huge-ass swords and shooting five arrows at once. So one can clearly see, even if one's too stubborn to admit it to whole game, that combat model is aiming for realism. Sure, much can be changed and adjusted, but that doesn't mean TW should now throw in Vanir, because they're cool and they were totally capable of fighting and M&B isn't ultra-fanny-sexy-super-wink-wink-mega realistic anyway.
Also, although I doubt that your knights were utterly crushed, it wasn't so uncommon to see band of peasantry taking on stronger forces. There's plenty of medieval arsenal that started as farm tools.
And I'm quite positive that even when holding cavalry will break into short charge-and-back when enemy is close.