Officer engaged in complete retreat (7)
I believe the answer is:
shelter
'retreat' is the definition.
(shelter can mean a retreat or hideout)
'officer engaged in complete' is the wordplay.
'officer' becomes 'lt' (abbreviation for lieutenant).
'engaged in' means one lot of letters goes inside another.
'complete' becomes 'sheer' (sheer can mean complete or utter).
'lt' put inside 'sheer' is 'SHELTER'.
(Other definitions for shelter that I've seen before include "Give protection" , "Shield as from rain" , "Protective structure" , "Housing or haven" , "Cover, protection" .)