1- A squad, with 5 MP in total, spends 1 MP and gets interrupted by Op Fire. The OF breaks the the unit reducing its movement to 1. The Squad movement is now 1. The Squad has already expended 1 movement so they must stop.
How many MP can the unit still use? Does it still have 4 MP (from the 5 original MP) or is the movement immediately reduced to 1?
2- Player A plays "Advance" on Player B. Both players play an "ambush" card thus breaking one of the opponent units. The inactive player (Player B) rolls and gets a "sniper event". The "sniper event" is resolved and lands exactly on the hex where the battle is being fought. Yes. There are no longer any opposing units in the hex, so melee ends with no further effect. If Player A had a Squad a "light wounds" action could prevent them from being completely eliminated.
2.1 - Does this means Player B destroys the unit of Player A and immediately wins the fight without Player A having the opportunity of rolling for defense?
2.2 - What would happen if the sniper event happened during Playrer A instead and Player A roll was inferior to player B? Player A would be eliminated due to the Melee roll. Player B would be eliminated due to the Sniper, absent any "light wounds" action assuming Player B's unit was a Squad.
Important to note that "light wounds" could not be used on a Squad eliminated from a lost Melee result.
3- A mortar or artillery fire adds +2 to FP when shooting into woods but the units in the woods still get the +2 of cover against that attack, correct? Correct.
Hope that you are enjoying the game!