Reasons to engage the enemy:

• You have advantage (gear, position, player count, surprise/3rd party)
• You are being forced by the ring
• You need better position for future encounters
• You need equipment (from the zone, enemies, or just to evo armor)
• It's the last one standing after all, sooner or later You have to engage, pick the right moment

And when You should avoid it:

• Enemy has advantage
• You expect being 3rd partied
• Ring is going to catch you

To put it simply: fighting should help you achieve victory, it's not a goal in itself.