He wants to stay until his contract expires in 2024. This is a win win solution I think, apart from Ancelotti himself this is a good thing for Real Madrid.
Ancelotti is aware that if he leaves Madrid at this time then indeed he will also be quite hated especially in the approaching time for the new season, obviously Madrid will be struggling to find a new coach so he decided to leave after his contract actually ended.
Now he must enjoy his last season in Madrid and must make a difference at least to give the best impression and experience for him in Madrid before he really leaves.
With that kind of money, Madrid can actually afford 4 or 5 other players. But PSG's release clause may have been made that way. In the end it was like ridiculous. Remember Real Madrid have had the experience of failed transfers, I'm afraid it could happen if Real Madrid buy Mbappe. Maybe if Madrid didn't want to buy, or other clubs didn't want him it could have come down in price. I prefer players who like to work hard than big players who are weak because they are too comfortable with money.