The Dawn troops temporarily retreated.
It's not that they were scared off by Li Pan, well, maybe a little, but the main reason was that the ambush lost its element of surprise. The mission's objectives weren't met, they walked into a trap and suffered losses, and were surrounded and pinned down by a large group of enemies. Continuing to fight would be too risky.
Moreover, in such a situation, the conflict could no longer be kept within a controllable range. If an electron cannon were to sweep the area and accidentally blow up the dam, flooding Night City, the death toll wouldn't matter much, but the sanctions from the Safety Committee and compensation to other corporations would really give them a hard time.
Especially since Dawn Society's recent profits had been poor, the performance unsatisfactory, and funds tight. Their stock price really couldn't handle such volatility.
