There is absolutely no support for the myth that camels scare horses. It's an ancient wive's tale with zero support and can easily be refuted by talking to people who actually handle both animals, or just watching Lawrence of Arabia (your stage horses will walk next to a thousand camels but a destrier is going to balk? Please!)
This means the combat tables really ought to be redone so that cavalry (knights, etc.) are more likely to smash camelry and less likely to be smashed by them. Camelry are not some rock-paper-scissors anti-horse weapon, they're just an inferior form of cavalry necessitated by the environmental and cost considerations of the armies that used them. They shouldn't have any 'advantage', they should just be slower horses who don't charge as hard. This may screw with 'balance', but balance is for ninnies, anyway.
I see nothing wrong with some armies just being inferior, although DBA's 'tournament' style skews away from that, this whole 'camel' mechanic - in whatever game it manifests, which is a bunch - is rubbish.
Camels handle extremely sandy terrain better. But their vulnerability to caltrops and plain sharp rocks - and the fact that no one likes to fight on sand dunes - makes this generally useless in combat, as nice as it is overland.