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Hello

If a mounted character is in an infantry unit that has 5 or more infantrymen, does the character benefit from the normal Look out Sir -rule?

In The Old World.

I don't see why not, from a game mechanics perspective. I know that logically, a flamboyantly dressed fop of a lordling on a horse surrounded by five retainers on foot wouldn't get any protection in real life, but it's a game, and in a fantasy setting at that. Suspend all logic and disbelief!

I believe matching troop types only matters for hiding characters from enemy shooting when you're outside of the unit. If you're in the unit and there's five or more models you are good to go!