It seems Carlo Ancelotti is not really popular in Brazil and they prefer to use a Brazilian coach instead of him, Lula da Silva, president of Brazil said if Ancelotti is a good coach he could be useful for his own country Italy and start coaching their national team.
He clearly said he is unhappy about Ancelotti coaching Brazil and prefers to use Brazilian coaches instead of him.

However, nothing is clear yet and there is still the chance for Brazil to use another coach and Carlo Ancelotti to stay in Real Madrid.


https://www.sportskeeda.com/football/news-brazilian-president-unhappy-current-real-madrid-boss-carlo-ancelotti-s-appointment-national-team-manager