The three-time world champion slowed in an attempt to back Nico Rosberg into rivals in the hope they would overtake him and Hamilton would be able to retain the championship.
Fearing the team could lose the race entirely, Mercedes bosses ordered Hamilton to increase his pace on multiple occasions - requests he ultimately ignored.
Now, speaking with Sky Sports, team boss wolf has admitted that the team were wrong to impose orders on Hamilton when the championship was on the line.
"In the heat of the moment, sometimes when you make decisions you get them wrong," he said. "In our mind, the way we think, this race is giving us the same number of points as other races and we try to win that one, not considering that there was much more at stake for the drivers."
"How the race panned out, we should have communicated differently and in hindsight let them race in the way they deemed to be appropriate," he added.
Bahrain International Circuit - Winter testing