Repeating Preschool?

I recently had a parent teacher conference with my daughters teacher and the principal. During the conversation they stated they feel that she needs to complete another year of preschool.

Background: my daughter is the eldest child, and we do not have any family or friends with children also close to her age. She has a younger sibling who is almost 2. She is 4, and will be turning 5 in July. She never attended daycare, and this is her first year of pre-k. We tried to enroll her in this same school last school last school year but they sort of ghosted us and after repeated calls after the start of the school year they told us there were no more openings for the class.

Current: During the conversation her teacher expressed that she felt my daughter was not interacting enough with kids her age. This pre-k class includes kids 3-5, and she tends to gravitate to the younger kids and likes to play "mom" to them. She noted that during their "circle time" (where they work on songs, prayers, letters, and phonograms) that she does not actively participate in what is being done. But I know she's learning it because she comes home and tell us and she retains the information. It sounds like they want to retain her purely on social things. Additionally, the kids her age DID attend the pre-k last year, so I feel like she's been unfairly looked at when her teacher is comparing her to them.

I think that my daughter wanting to play more with the younger kids makes sense given most of her social interaction prior to being in school was either adults or her younger brother. I really don't agree with this, and I guess I'm just wondering should she be retained? What can I work on to improve her socialization outside of school? I'm concerned that retaining her will also affect her academically. She's on par and not behind in any academic means, and that concerns me that this will affect her down the line if she isn't being challenged or taught on a level that she actually lines up with.