Kyle Walker is still a valuable asset to the squad, and letting him go at this point without finding suitable replacements will be terrible. He's now 33 years old and will most certainly lose form in the near future, but I believe he can do amazing things and play well in the meantime. Pep is a highly experienced coach; he understands which players he needs and which to sell. If he still wants Kyle Walker, he sees the potential in him and will do all in his power to keep him at Manchester City.
I think Pep know the real strength of Kyle Walker, rather than Walker join other club and it will cause an another challenge in the future, it's better if Walker just stay in Manchester City so he don't need to find how to beat Walker. Walker is a good defender even though he's lazy, he can't play in inverted full back position because it will drain his stamina. But if he's going to fight one on one with opponent player, Walker mostly win, just like how he destroy Vinicius Jr.
