I see your point but they don't have to retreat that far. Ishevka and Maiske are still in high ground, not to mention having Kostiantinivka and O-Drushkivka (industrial complex and some blocks N. of it) in the south flank. North of Bilokuszminivka the terrain rises again, we can see some (old, I guess) trenches there.
Well... you don't want your front line to be your best and only line. You want to have fall back options. And Ukraine is going to be utilizing these fallback options. There's also no evidence that Ukraine is taking greater casualties then Russia in Chasov Yar. So it's a logical place to put up a very stubborn defense with no real flanking threats. Again there are situations where Ukraine fails to withdraw in a timely manner resulting in terrible outcomes. The current situation in Velikaya Novoselka is a great example, it appears to be the first substantial encirclement of Ukrainian forces since '22. Similar problems occurred during the final stages of the fighting around Artemovsk/Bakhmut, Avdeevka, Kurakhovo, etc. Right now Russia is trying to create a similar scenario around the much larger Pokrovsk metropolitan area. But in Chasov Yar Russian forces are assaulting neighborhood by neighborhood against determined resistance fighting from prepared positions. Chasov Yar and Toretsk are places where it makes sense for Ukraine to put up this kind of a fight.