If Don Carlo can lead Real Madrid to win La Liga and the Champions League, then it will be a sweet farewell for him and Real Madrid. But I wouldn't have high expectations of what they will achieve this season, because it's not an easy task at all, especially since their competitors have also built their squads during this break.
I haven't heard anything about Nagelsmann and Real Madrid. And also I just heard this rumor for the first time, because previously many speculated about the possibility that Real Madrid would return to their former coach, and that has become their habit.
well, that all we can hope for because Ancelotti was actually a great coach during his time at Real Madrid and now there are rumors of him leaving for another team. I'm a little unsure whether Real Madrid will be able to get their title back in the Champions League next season because next season a lot of teams will change their composition to become stronger and if this is indeed the award from Ancelotti for Real Madrid to win the Champions League title it will be very touching.
Regarding the Nagelsmann news, I haven't heard any news either and it looks like it's just speculation by Real Madrid fans, but my hope is that Real Madrid, at least next season, can get the champions league trophy as a farewell to Ancelotti.
Ancelotti has already left as he has accepted an offer from the Brazilian national team for next season so this is his last season in Madrid.
Talking Champions League is going to be tough but that doesn't mean it can't be. He'll have to make the new squad, especially in attack, better especially with Benzema gone and Ancelotti is also aware that to make a good farewell there should at least be a trophy for Madrid this season because even if he doesn't he'll still be respected but it won't be as memorable a farewell.
It's still too early to talk about a new coach but it's probably just in case Madrid and Ancelotti don't do well as the season progresses.