Why some papers are retracted and others not?
In general, an editor will choose to issue a retraction when misbehavior or errors undermine the "core" of a paper (authors may request a retraction, but ultimately it is generally the editor who decides).  An erratum or correction, on the other hand, is for when there is a problem that doesn't change the "core" of the paper.

Different editors will draw the boundary differently, and some things are in a grey area.  In this case, it looks like reuse of background material (a grey area on self-plagiarism) shaded over into plagiarism from another closely related piece.

In most cases plagiarism, even of a background section, would be enough for a paper to be retracted due to the issue of dishonesty, which cases doubt on everything else in the paper.  In this case, however, it appears that given the close relationships between the authors and the papers, the editor judged it less a matter of theft than of sloppiness, and opted for the lesser correction.