It is pronounced mê·lée. If french confuses you, May Lay.
http://www.merriam-webster.com/dictionary/melee
To disagree with Webster (unless your british), makes you an idiot.
If you are going with Melee's interpretation, remember
two things.
1) The sound quality for the game wasn't that great.
2) The voice acting sucked.
3) The Gamecube had shitty sound chip.
You could argue all you want but there is a reason why the Gamecube never got a Guilty Gear game. In fact, Nintendo didn't get a Guilty Gear game until the Wii.