What did I do wrong? Caltrops vs Sneak

[keybounce]

I want to know what I did wrong / what I misunderstood.

I encountered a sneak, with Mistriel.

I had Caltrops.

Caltrops says I can discard to defeat an opponent up to 9, and the sneak fits that.

Game asked if I wanted to evade or encounter. The "evade" button was lit and flashing, as was the green arrow to the right.

I hit the arrow.

Instead of defeating the sneak, it was shuffled back into the location

What did I do wrong?