How (and why) did Hitler create "the world's largest traffic jam?"

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Because Hitler was a horrible "traffic cop."

One version of Fall Blau called for the Germans to advance east to Stalingrad, then along a broad front south on a line from that city, and Rostov on the Don. While Army Group South would have been advancing into "two" directions, it would have been one at a time, rather than two different directions.

Hitler wrongly believed that the "cork in the bottle" was Rostov on the Don. So he diverted part of Army Group B (Hoth's Fourth Panzer Army), to help Army Group A (under Kleist) to capture this key city. In fact, Kleist did not need this help (and Hoth's Panzer were actually in the way), as evidenced by the fact that Kleist advanced 300 miles to Maikop in about a month. Where Kleist needed help was further east, toward Grozny, and Hoth could have provided this leverage by moving south parallel to Kleist, on the east.

In effect, Hitler's view became self-fulfilling as he created a bottleneck at Rostov, and wasted a month of campaigning from Hoth that might have made the difference around Stalingrad. Subsequent events showed that the narrow corridor through Rostov was insufficient to supply both Kleist and Hoth, whereas the subsequent campaign showed that it was (barely) possible to supply both Hoth and Kleist if Hoth's starting point was Stalingrad.

Additional Source: Gordon Corrigan, "The Second World War: A Military History."

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