The scenario description points out that a significant issue in this circumstance was the ability of the Austrian army to use their artillery against the Schutzbund.

Since the scenario starts out with the Schutzbund on the hills (and in this setup in the woods as well) and it is pitch black (sighting range is 1 hex), I started 2 companies of infantry with attached HMG support up the hill commanded by a Lt. Colonel, with a Captain and Two LTs in tow. The other company of two platoons and all of the artillery set up in the town at the foot of the hill.

Upon reaching the Schutzbund and experiencing opportunity fire the Lt. Colonel had an inexplicable fit of the heebie-jeebies (perhaps it was a case of from bad to wurst?) and basically ran away. It took 1/2 an hour for the Captain to gain control (see decapitation rules) during which the two forces stood next to each other and the Austrians did hammer away with their artillery causing nearly as much damage with friendly fire as they did to the Schutzbund. Once he got control the captain led the men in a series of assaults that completely destroyed the Schutzbund, captured the Baon Kadet and killed the other two leaders, and did so within two and a half hours of their first march.

The total price was 1 step of Austrian infantry that, having been disrupted by friendly fire and was then shot at repeatedly by the Schutzbund to some reasonable effect.

The scenario itself is wildly unbalanced but it clearly portrays the inability of such political troops to stand against regulars. If the numbers of Schutzbund were doubled they might have some chance but I would still bet on the regulars.