This encounter is very tough in my opinion and the PCs here were lucky to get out having lost only one of their number. Admittedly I had added an extra arborean to account for 6 PCs facing it but even without this it would have been hard to get through.
I played the decision to retreat as a pragmatic one that the PCs would take but looking back on it, I'm not sure it entirely fits the character of all of the group. Lavren certainly would take a pragmatic view but Dulvarna and Erlmoor would be less likely to. Anyway, I decided that the PCs would retreat to avoid losing more of their number and thus, a very likely
TPK was avoided.