I know that these teams have a level of difficulty that makes them not wrong if they are made as non-favorite teams.
I see that apart from the reason because of the difficulty of competing, there is no convincing logical reason.
Real Madrid and Manchester City have key players and talented players that Arsenal, Bayern Munich, PSG, and Barcelona lack. To win the Champions League, these clubs must first eliminate Madrid and Manchester City. Guadiola is the best coach and has the necessary players to defeat other clubs. So, if Arsenal and Manchester City meet, you can bet that Manchester City will win since they have superior players than Arsenal. Last season, Real Madrid and Manchester City were the favorites to win the trophy. However, the next season will be a new season and all clubs need to play matches first before considering who will get the opportunity to win the trophy. With Mbappe, some believe Madrid will get the chance to win the UCL again because they have a better striker who is difficult to stop on the pitch. Let's see how the next season goes and who will be the winner of the competition.
City will try their best but I think that it is only Real Madrid that will eliminate them if they clash again in any stage from the second round. However, susprises are inevitable and no team should be underestimate.