And this wasn't even an unnecessary retreat. Even before Vizuul warped in the spaceships, the Horde faced just as many named demons, fuckton more normal demons, all the while fighting at half a capacity because their ranged force had to babysit the Alliance rather than supporting the Horde front, due to Alliance's brightest commander forgetting to bring his own ranged troops to a fight as important as this.
Then Vizuul warped in the spaceships, that shot space lasers all over the Horde position moments before the cinematic triggers. And those bright as fuck laser beams can be seen from the Alliance position just fine, so the Alliance can't even feign ignorance here. After they got on the gunship, they had the perfect aerial view that was the clusterfuck that was the Horde position (with the gunship crew being able to see it even earlier).
The retreat was also properly announced with a sound signal as per medieval-esque standards of on-the-field communications, Alliance knowing Horde sound signals (they even managed to imitate them to trick the Horde in the previous faction war) and Varian clearly realizing the Horde is retreating after hearing the horn.
And even if everyone in Alliance suffers from severe mental development issues and can't realize Varian is realizing that the Horde is retreating, as well as suffers from extreme tunnel vision so that they can't see big-ass bright lasers of doom shot at the Horde or see the area around them from aerial position, there's a simple (objectively speaking, not Alliance speaking) mental exercise to answer the question whether the Horde had valid reason to flee.
Particularly, asking oneself the question "why would the Horde want the Legion to win?" Because even if one was as braindead as Genn and thought everyone in the Horde spends every waking second of their lives plotting the Alliance's downfall, they still live on this world and don't really have the desire to let the Legion destroy it. Orcs were also enslaved by the Legion, Forsaken were wiped out by the Legion's creation, then invaded and forced out of their city by the Legion, Blood Elves were the sole target of the last Legion invasion. Not exactly a lot of reasons to even let the Legion win just to curbstomp the Alliance, let alone plot directly with the Legion.
Furthermore, contrary to the common Alliance whine there's no cause and effect link between the Horde retreating and Gul'dan dropping the Fel Reaver. If anything, Alliance's retreat, caused in turn by Horde's retreat, saved the Alliance from him dropping it right on their head rather than with them safely packed onto the gunship.