In my last couple of campaigns I used a homebrew mass battle system, but now I want to give a chance to the original unit cardplay.

Revisiting my 2nd edition ruleset there is a spot I think isn't quite clear. The rules hint that several unit cards can be in the same area, but not clearly saying that.
Plus, there is the rule that "when a unit is forced to fall back to a space occupied by a friendly (or enemy) unit, is destroyed. So, if friendly units can co-exist in the same area, why is their retreat path blocked by friendly units?

At the same time it must be hugely inconvenient in big battles with 20+ units per side, to have stacks of cards in the same area. Also I think it can be abused even in small battles, where the general in disadvantage stacks all his army in the same area.

So, I guess my questions are 1) are multiple units allowed in the same tile and 2) if so, has anyone found remedies for the disadvantages this brings?