McLaren's decision not to pit under an early safety car intervention when every other team pitted both drivers wrecked their hopes as Red Bull's four-time world champion Max Verstappen took control and claimed his 70th career victory.
The Dutchman moved within 12 points of Lando Norris at the top of the drivers’ title race, six ahead of luckless Australian Oscar Piastri, who looked certain to win until derailed by McLaren's blunder.
"It was a decision not to pit, and in fairness, we didn't expect everyone else to pit," said Stella.
"Obviously, once everyone is pitted, it makes that the right thing to do.
"When you have the lead car, you don't know what the others are going to do. The main reason was related to not expecting everyone else to pit, so it was a decision.
"And as a matter of fact, it wasn't the correct decision."
His mea culpa on behalf of McLaren offered little solace to his drivers, particularly Piastri, who could have moved within seven points of Norris ahead of the season-ending Abu Dhabi Grand Prix if he had won.
Norris said: "It's tough. We just have to have faith in the team to make the right decision.
"It was a gamble, and we were the ones who took the gamble in a way. Now it's the wrong decision, and we shouldn't have done it - Oscar lost the win, and I lost P2, so we didn't do a good job today.
"We've done plenty of good jobs in other races. We won the constructors' six races ago because of that. So, not our finest day, but that's life."
Piastri said he felt speechless and struggled with the outcome.
"Clearly, we didn't get it right tonight," he said.
"I drove the best race that I could, the fastest that I could. There was nothing left out there. I've tried my best, but it wasn't to be tonight, unfortunately.
"In hindsight, it is pretty obvious what we would have done. I am sure we will discuss it as a team. It’s not all bad as it has been a good weekend too - the pace has been very strong, but it is a bit tough to swallow at the moment."
Both drivers and Stella made clear they were expecting to review the race and the decision-making before reaching any conclusions about their approach to the season-ending Abu Dhabi Grand Prix next weekend, where Norris can clinch the title if he finishes on the podium.