After further experimenting, it seems to work fine against most enemies.
But when fighting some enemeis, like ghasts in Ghastria, I have 0% success rate on cleave. Every time I kill one the character just stops combat and stands there.
I don't think this was by random or a coincidence. I was surrounded by four of them and every time I killed one the cleave did not happen. I had the same exact experience yesterday with the same enemies.