Agreed, but...
I wouldn't dispute that they didn't notice "in time" - they did get hit in the flank after all!
Now we're beyond that point, damage done, time to move on...certainly some of the formation have probably noticed by now and be reacting if they are still upright

How long should it take the rest to react? If there was nothing in front of them they would be assumed (by the rules) to automatically notice in time to turn around and fight the melee at no further penalty beyond what resulted in impact. My question is, should routers in front of them delay their reaction to the threat? I obviously think not. Impetuosity/bloodlust I think goes out of the window as an explanation for self-harmful behaviour in this situation. Perhaps there would be justification for asking them to take a test to turn in time.
If the rules are clear, no contest, play as RAW unless there is an errata on the subject. (There are plenty of things I personally disagree with that fall into this category

)
If they are unclear, and in the absence of authors clarifying, then a consensus can be reached. And it is not unreasonable IMO to consider what you think the rules should be trying to achieve, what is realistic, what is best for gameplay, cheese avoidance, etc. and throw that into the pot. I personally prefer to see debate along these lines than trying to take the imperfect text, subject it to some sort of fuzzy logic exercise, and presumably tease out the clarity that doesn't really exist by some form of "adjust, add to, or delete from the text by the minimum amount possible so it has no holes or contradictions" process.