Yes you are right, PSG has no many choices extending the contract or release it to Madrid I think we all know the right choice if the contract is not extended
Another rumor is related to the problem between PSG and Madrid reportedly the two teams are not in good condition so PSG prefers to release mbappe to another team anyway except Madrid while Mbappe himself prefers move to Madrid, looks like a complicated agreement here.
I don't think Real Madrid are the only team most likely to sign Mbappe if PSG want to sell him. Mbappe could move to a Premier League team if they offer value that is hard enough for PSG to refuse. You have to know that Real Madrid didn't want to pay Mbappe big money to PSG because apparently they just wanted to sign him for free.
If Real Madrid really wanted to buy Mbappe, they should have offered him a high price in the last few seasons. But what happened was the opposite, Real Madrid always approached Mbappe when he had only one year left on his contract. If Real Madrid are willing to spend $190 million for Mbappe, then that means they really want Mbappe. But while I have not seen it that way.