There is a difference between hiding your head in the sand, and voluntarily sticking it into a wood chipper.
Having the sense to avoid people and situations that make us less happy and less content seems like an intelligent choice, particularly when we remember that some people's objective is specifically to make us less happy and less content. It's not cowardly or pollyanna-ish. It's taking a realistic look at the possible outcomes of engaging them, and deciding that none of them are palatable and making the decision not to beat that dead horse again.
So if engagement makes us less happy and more stressed, why hand them that victory on a platter? Why not do the things necessary to live a more harmonious life with less toxic people in it?