Why bother arguing? Hit-and-run is using direct damage magic in the first round, followed by retreat or repositioning, and that's it. All other magic is a waste of mana, which doesn't harm the defending side... and this doesn't apply to spellcasting units, only one unit is controlled by the mouse - wizards (when was the last time you had them in your army and what direct damage do they deal with their magic, or are you playing "Loss of Innocence" every day?)...
Why all the fuss? Of course, only the second option is correct...
And even simpler: if someone dies on the enemy side as a result of using any magic in the first round, then that's it... continue playing...