I thought that if a coach coaches a national team, it doesn't prevent him from coaching a club... I could be wrong, but I think some coaches have coached national teams and clubs at the same time... Although probably for Real Madrid this option is not suitable... I didn't realise Ancelotti would be leaving the club in a year...
A coach can be in charge of a national team and a club. But this will not be the case for Ancelotti. He will be leaving by the end of this season next year. He has been assigned to lead the Brazilian national team to the 2024 Copa America. And the competition will start in June next year and by then almost all the leagues in Europe have ended. For now, the coach of Fluminense, Fernando Dinizis in charge of the Samba Boys until the Italian take over next year.
Coaching the Brazilian team will be a challenging task for the Italian because national teams are not like coaching club sides. In national teams, you will have to work with many bodies such as the Sports ministry, Football association, and even the president. He has to face the entire nation and not just a city as in the case of football clubs. The Italian will want to make history with the Brazilian team by winning competitions starting with the Copa America.