Let's focus on what made Naravane make that statement that is a departure from the traditionally held IA position which it has taken even in opposition to the governments in power in India. Indian army is otherwise relatively apolitical, but on this issue, it has taken an unflinching stance. What is making it backtrack from it now? Why now? Forget the imbecile Shekhar Gupta.
Firstly, I wouldn't say Indian army is apolitical, that's push it a bit. One could say historically it may have been, but that position has been eroding for a long time. If we bring religion into this calculation, the Indian army is clearly institutionally anti Muslim. But, leaving that aside.
I honestly do not see it as backtracking, but it does have mainly two elements.
1. If we agree in writing our existing positions, you are basically agreeing to a de-facto extension of LOC it may not be called an LOC, call it what you like, but it would have the same effective status as the LOC. If tomorrow Pakistan was to move forward and take control of those heights, the world would condemn us because of that written recognition of existing positions.
2. the Indian army is desperately trying to come across as the peacemaker, which it has always managed to do successfully, it instigates all the wars but it keeps it's image intact. Only with the ascendance of Hindu extremism and extremist politics has the Indian army taken a hit as well, losing against China and Pakistan has not helped. So the position taken by the army chief isn't totally new but the timing in my opinion is more about politics then anything else.
The only military benefit they gain is reallocating resource towards China, and one less headache to deal with. the siahin conflict is costing both countries but India is paying a far far heavier price then Pakistan.
In my view, it's not a big deal.
The big deal is that he made that statement and made that offer, whereas it should have come from the government, so far the Indians have made massive efforts at keeping the army out of political affairs, especially foreign relations. This matters because the more Indian army gets involved in political matters the more it's professionalism will suffer.
Pakistani army has found a balance between its traditional position in political affairs, because of our history and dealing with professional issues. But it came at a cost, and it took time. India has just started on this journey, and there is a cost to pay, which it will.
Let's see how it unfolds.