I've been thinking about this a bit, because it is an issue that I think we want to avoid overcomplicating if at all possible. In my ASL port I used some existing ASL rules for perimeter determination, and grafted some escape rules and a counterattack option for the defender. So when the engagement ends, a perimeter is determined. Any attackers/defenders that are "isolated" by the perimeter determination either have to "escape" to friendly lines, or have to be rescued by a counterattack/continuation attack, which must happen within a given (short) time period. The advance is then averaged based on the perimeter, and that is fed into the Op Layer as an advance distance. A bit complicated in the execution (it is ASL, after all), but ends up fairly smooth in the Op Layer.
CM is not quite as smooth, because there is no easy way to determine a perimeter. I see this as needing a bit of gentlemanly agreement between opponents, because there are so many variables. I think using phase lines is probably the best way, but definitely not touch zones - they would have to be occupy types. These would have to be every 100-200 meters depending on the depth of the map. No problem, if the attacker achieves the "500 meter" terrain objective, then you put 500 meters into the Op Layer. But what happens when the attacker occupies the 500 meter by running a team forward, and the defender then holds the other objectives?
In order for the attacker to dislodge the defender, i.e. count the advance as 500 meters, the attacker must have more forces at the 500 meter point than the defender has behind it, counted as manpower, including vehicle crews. So if an attacker has managed to insert 50 men to occupy the 500 meter point, but the defender only has 30 men between the 200 and 500 meter point, then the defender has been outflanked/dislodged. The defender must withdraw/escape, and I suggest that an escape mechanism be built in somewhere. In this case the attacker records a 500 meter advance.
If the attacker is outnumbered by defenders that are behind them, then they are the ones who are isolated and must escape. In this case the attacker records a 100 meter advance.
Now there are plenty of situations that will lead to complaints. "But I've parked 10 King Tigers on a hill at the 700m objective with an FO that can interdict everything for miles around, but the defender has 60 guys broken huddling in a wood at the 200m point! How am I possibly isolated?!?" Well here we would either exercise some gentlemanly common sense and give it to the attacker, or just say "them's the rules, it is what it is". We want to avoid having to include exceptions for every possible variation. This loses us a bit of fidelity, but keeps us from bogging down completely.
The good thing about this situation is that it avoids small pockets and tactical bypass in TO completely, which I think is desirable. It is still totally possible to circumvent and bypass a force; you just have to either defeat the defender and gain freedom of movement, or push forces through where the defender is not, which I think is fairly realistic.