Hi!
Did some testing, it seems that the retry button that's available after a mission failure does restart the mission, but the mechs are in whatever state they were when the mission failed (Damaged, missing structure/stress, destroyed outright).
Now I'm not sure if that's specific to modules, but at least with the combats in the module I'm working on it's the case.
Video included (to note, I initially entered the mission with full health and 1 repair missing from each mech).
Hopefully this is useful :)