Thank you both for your responses. @GMiner, yes you are right that putting MF on the tower will make me be able to target both. But sadly in that particular scenario that tile is where my MF ended up, don't ask me why :). So it is really limiting because if that guard would have been an archer...
Please see the attached image for reference. I understand what the message indicates and what the valid move is. I also know that I can hit the riders first with another unit. So I can hit the guards with my MFs to get around the restriction. What I'd like to understand is why are we restricted...