Liverpool experienced a decline in form because Mane left, as well as when Ronaldo left Manchester United to join Real Madrid.
Good players will definitely be missed by their erstwhile club, but if the team is made up of quality players, their absence will not be felt that much or for a long period of time. Liverpool didn't have a bad season because of Sadio Mane's exit, they had a terrible season because most of their players were in horrendous form and the manager wasn't able to bring the best out of them. I think clubs should always allow their players leave if they say they want to, a football club should not be built around a few players but the entire team.