Time was running out, and Leon had two options. How he chose to proceed with his current circumstances would determine the future of his and his men. If he stood his ground and tried to defend the city against the German division which was currently encircling them, then there was a high chance of defeat.
However, if he chose to retreat back out of the only real region of strategic interest within the Grand Duchy of Luxembourg, then Leon was not only admitting defeat, but would be forced to fight on the defensive going forward, risking total expulsion, and thus failing to achieve the goals he had been tasked with by the French High Command, who were more or less panicking at the moment.
Standing and fighting was a major risk. He had already lost his veteran brigade who were the most capable forces under his command. And it was unknown how many losses precisely the German relief force had suffered.