This is another problematic "What If ...?" as it assumes that Hitler would agree not only to a tactical retreat, but to strategic one. Hitler did not do that ... ever. Maybe Germany would have retreated with a different ruler other than Hitler.

However, even if this were the case I do not see much point in it as a retreat after Vyasma would have been simply disastrous. Winter had already set in by the time of Vyazma (January-March, 1942) and trying to extricate German equipment would have been exceedingly difficult given the weather and the fact that the Russians were pushing hard against the German line. Hitler's order to hold fast was the right one in this case, as most military historians have agreed. Unfortunately, Hitler took from this that holding fast was always the right decision and we know how that turned out. However, in early 1942 Hitler was right. Za Rodinu has already pointed out how counter-productive such a retreat would have been. Retreating from the area in front of Moscow would have also been disastrous politically, and never forget that Hitler had to think politically at the same time as militarily.