Withdraw from Combat

The Better Part of Valor
Just when it's smarter to run away may depend on the way the game rules handle disengaging. The original three Little Brown Books do not address running away. There is no disengage action, no attack of opportunity, there is not even morale for monsters, although the rules do hint at using combat mechanics and morale rules from Chainmail, the decision is left up to the referee running the game. Which is exactly how I prefer it to be.
The White Box is intentionally aimed at providing the players, including the person acting as referee/judge/GM, with tools necessary to make critical judgments about survival during combat. Hit points represent a pool of resources that will slowly drop as one takes damage - usually in increments of 1-6 points. This allows the players to have a feel for whether sticking around to finish the fight might be a good idea or a bad one. Experience is awarded for killing monsters, but more importantly for grabbing treasure and getting home with it. Survival and building a stronghold for retirement is the goal of the campaign game.
Adding morale for monsters seems realistic to me. Having started out as a wargamer and student of Napoleon who stated, "In war, the moral is to the physical as ten to one.", I cannot remember not using morale for my monsters. They mostly care about survival and will flee from a losing battle once they figure out they are losing. Characters should be just as smart. And the rules should allow this to occur.
In some later systems, disengaging from melee is tantamount to suicide. Turning one's back to the enemy invites a free attack and this often proves fatal to an already damaged character. The result too often is a feeling of being "stuck-in" during melee where "to withdraw" is not a good option. Of course any discussion on the matter often devolves into questions regarding "what is realistic".
The mechanics of White Box, and by extension we can include later editions, is designed to allow players a chance to manage a set of limited resources and to adjust in-game decisions based on a risk-reward paradigm. The decision to risk failure for the prospect of reward is part of the excitement of the game. It is rarely an "all or nothing" proposition that then hangs on the outcome of a single die - why? Because that limits the fun.
Sometimes the monster turns out to be tougher than the players expected. Sometimes the tactics don't work. Sometimes luck goes against the adventurers. Being able to control exposure to risk and better one's odds is challenging and ultimately should reward smart play. So let the character's run away. The monsters should be happy they won the fight and get to keep their loot and evil lives (for now).