With respect guys, Blast Markers and Broken Formations does not help much either as it refers back to 1.9.6 in shooting, but again this section is specifically referring to 'panic' rather than 'damage'. Obviously we can infer the formation panicking relative to a threat, so would take off units nearest that threat.
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1.13.4 Blast Markers and Broken Formations
Broken formations do not receive Blast markers after they have been broken and before they rally. Instead each Blast marker that the formation would normally receive causes an additional hit on the formation, with no saving throw allowed. Apply these extra hits as you would from normal shooting (i.e., from front to back of the formation). These additional hits represent individual units panicking and fleeing the battlefield, and they make broken formations extremely vulnerable to enemy attack—you have been warned!
1.12.7 Work Out Result, also refers to 'panic', but also includes hacking down or 'damage'
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In addition, the losing formation suffers a number of extra hits equal to the difference between the two sides’ result scores. There are no saves for these hits, which represent units being hacked down as they turn and run, or disintegrating into a panic driven rout as they flee. Remove these additional casualties as you would hits inflicted in the assault phase (i.e., units in base contact first, then those closest to the enemy, etc.).
1.9.6 shows that hits are applied to the appropriate targets in LoS and range
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1.9.6 Allocate Hits & Make Saving Throws
You must allocate hits inflicted on your formation against targets that are within range and line of fire of the enemy. Hits are allocated “from the front to the back” of a formation. Note that this is the opposite of suppression. AP hits can only be allocated against infantry units, and AT hits may only be allocated against armoured vehicles. Hits must be allocated to the closest potential target first. You may not allocate a second hit to a unit until one hit has been allocated to every potential target, or allocate a third hit until all targets have been allocated two hits, etc.
The distinction between units panicking under fire and panicking / being killed in an assault is a description rather than a process. This is why Neal Hunt pointed out in his reply that these kind of hits need neither LoS nor Range to be applied. Consequently Neal concludes these kind of ('panic') hits should be applied to all units (other than those that are Fearless)
irrespective of whether the units are inside transports or not.
Basically, the injunction to apply hits "as in shooting" or "as in assault" is merely to apply the hits 'front-to-back' relative to the nearest threat, rather than applying them to the nearest 'visible' unit ie transports only rather than their contents.