OK - I e-mailed the captain and here is his response (names edited to protect the innocent):
'John' simply said "screw it" after getting pummelled in the first set. 'John's' a solid 3.5 and he said he literally couldn't even score a single point against 'the self-rated guy', and that he's clearly a 4.0 or even 4.5. 'John' had been sick all week and didn't want to wear himself down further by playing another set like the one he just endured, so he told 'the self-rated guy' to take a 6-0 for the second set and enjoy his last season as a 3.5. (Of course 'John' was polite about it....he's an incredibly nice guy, but he knows his limits.)
Looks like he just said 'enough'...
Watch how you tell that story, because quitting results in a default, not a retirement. (a default is 6-0, 6-0 and doesnt effect the rating in either way)
I read down to where you said he was sick though and cut him some slack, you are only really allowed to retire if you can not physically continue. (like if you get sand caught in your eye or something.....
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Im not sure we will ever know how retirements work toward a rating.
The system does go by the difference in games and you only have a 6 game gap instead of a 12 game gap. (which would be like winning 6-3, 6-3)
But if they do something special because it's a retirement Im not sure anyone would ever know. (the league doesnt divulge a lot of specifics of how the actual score translates into a dynamic rating, other than it's based on games won and lost)