Guards eliminated in Melee with other units available

[gulliver62]

In a melee
- good order allied 1/2 squad guarding prisoners
- 2x good order allied squads
- 2x axis squads
melee results
- guarding 1/2 squad is eliminated
- 1x axis squad is eliminated
We interpreted the rule as:
One of the good order allied squads remaining assumed guard duty and was still able to deploy into 2x 1/2 squads with one of those guarding the prisoners.
Everyone is still in melee

Have we interpreted the rule correctly?

 

[buser333]

Prisoners is not the best-written rules section but it seems like you played it correctly to me.