My belief is that favorite teams like Madrid and Man City are just trying to lose at the beginning and in the next round will finish off all existing opponents.
I don't think so. Champions League matches are very important for every team. So it is unlikely that the parties will be defeated on purpose. I'm sure Manchester City and Real Madrid were defeated because of their weaknesses.
I wonder why a team will want to be defeated on purpose, it does not make any sense actually. For Manchester city's loss to Sporting Lisbon, i feel it was the carelessness of the players that caused them that defeat because Manchester City were the first to score and all of a sudden, they became so porous and the defenders made lot of mistakes that led to the penalties they conceded to Sporting Lisbon. Real Madrid losing to AC Milan was totally lack of teamwork amongst the players.
City have not been in their best form this season. Manchester City lost against Bournemouth in the last Premier League match. And in the next match, Manchester City was defeated by a big margin of 4-1 against Sporting. As City also lost against Bournemouth, I don't think City conceded the defeat against Sporting on purpose. The team was defeated because of the weakness of Manchester City's defense.
I don't agree with you that Manchester City have not been in their best form this season because if not for the last two matches they lost, you can agree with me they were doing very fine as they only lost one match each in the Premier league and in the champions league so it's not enough to say they are not in their best form. Their loss to Bournemouth was completely defensive error same with their loss to Sporting Lisbon though Sporting Lisbon have been in their best form since last season till now so i didn't see their winning against Manchester City as a surprise.
On the other hand, Real Madrid has been unstable since the beginning of this season. Mbappe's addition to the squad has resulted in a loss of bonding between the players. Mbappe, Bellingham and Vini we are not seeing good performances from anyone. This is why Madrid lost two Champions League matches.
Yes, i can agree with you that Real Madrid have been so unstable since the season began because even at the start of the season, they gave a very wrong impression by playing draw in their first match of the season and i feel what is wrong with the team is just lack of understanding among the three players you mentioned.