Your citation of Milligan is incorrect. Merryman, as 1st Lt. in the Baltimore Co. Horse Guard, a military unit which aided the cause of the insurrection, and was involved in burning railroad bridges and cutting telegraph lines to hinder the Union war effort, was arguably covered under the laws of war at the time he was apprehended. Milligan was a civilian; Merryman was not.
The civilian courts were open and functioning.
The Federal military could not lawfully try Merryman at a military tribunal.
The bullcrap charges were dropped.
Not even arguably, so it was not argued.
2. That a military officer has no right to arrest and detain a person not subject to the rules and articles of war, for an offence against the law of the United States, except in aid of the judicial authority, and subject to its control; and if the party be arrested by the military, it is the duty of the officer to deliver him over immediately to the civil authority, to be dealt with according to law.
Ex Parte Merryman