Hey! I know over-exfoliation is the absolute worst :-/ your routine looks pretty good. I see that you use only lightweight essence in the morning. Could you add a heavier moisturizer like CeraVe AM? It has sunscreen as well as would give extra emollients to the skin. Also in the PM, have you tried adding a facial oil? I found that it helps my skin a lot in coming back to normal. I use grapeseed oil but you can use any you are comfortable with (not mineral oul tYou don't really "burn off" layers of skin. Exfoliants act on the uppermost, dead layers of skin which are shed off periodically, naturally. Exfoliants only speed up the shedding and essentially leave the deeper layers untouched.

That exfoliants cause thinning of skin is a myth. Its actually quite the opposite. Read this: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2921757/

From the above,

The exfoliative effect of chemical peels stimulates new epidermal growth and collagen with more evenly distributed melanin.

Also this QnA: https://www.realself.com/question/myth-fact-chemical-peels-stimulate-collagen-production

The only thing that you should watch out for is over-exfoliation imo. That is never good and messes up your skin barrier. Controlled, regular exfoliation is actually an excellent anti-ageing, acne controlling, PIH reducing mineral oil though, that wont add any moisture) Your derm is quite right about Urea. Concentrations below 10% are actually excellent hydrators. If you're apprehensive, try an 8% urea product. I would suggest your routine to be like wash > essence > urea > cerave > oil. But use only those products which you know for sure your skin likes, no new ones. I hope it heals quickly!