To give a little background here, when the Soviets launched their massive counterattack during the Battle of Moscow, many senior Wehrmacht generals wanted to withdraw their armies west of the Oka river, shortening the defensive line and consolidating existing forces. This was in direct contravention of Hitler's previous order, Directive 39, where he ordered the army to hold at all costs and to transition to the defensive. Hitler countermanded the Wehrmacht orders and relieved some of the generals that disagreed with him, including Heinz Guderian.

Hitler likely made the correct decision in this scenario due to the situation on the ground. By the time of the Soviet counterattack, most of the German frontline units were severely understrength and missing a lot of heavy equipment such as armor and artillery that were necessary for ground warfare in World War II. But that is to say, they still had some pieces. A withdrawal always creates a situation where equipment and personnel may often be abandoned or lost en route, and increasingly so if the withdrawal is stressed by pursuing enemies. On top of this, German communications and control of their frontline troops was limited. It could take days for a commander to reach the frontline from his command post 30 miles away, due to poor roads, bad weather, and broken down means of transport. Telephone wires and radio signals could easily be impaired as well, further ensnaring communications. A disorderly retreat with little high command control could easily result in a situation where disorganized retreating German forces are forced to abandon their heavy equipment in an effort to outrun the enemy, assuming that the units don't just disintegrate as every man tries to save himself. That would likely have resulted in the destruction of much of Army Group Centre as even the troops that were able to retreat as ordered would lose much of their existing equipment to the point that they would be ill-prepared to defend against the armored thrusts of the Red Army. As it was it was a very near thing, but the Germans were able to hold off the Red Army and staved off the encirclement and annihilation of the Rzhev Salient, to say nothing of preventing the destruction of 2nd and 3rd Panzerarmee by encirclement attempts. The Germans were eventually able to evacuate the Rzhev Salient over the course of 1942 and 1943, instead of having the guts of the center German army group being torn out and leaving the insides exposed to attack.