I've heard the same news about Mbappe being in talks with PSG to extend his contract. The French striker is reportedly negotiating his renewal with PSG, although I couldn't find a reliable source for this information. Mbappe has already expressed his interest in staying at PSG for this season only and leaving as a free agent in 2024. Despite various reports circulating, my expectation is that he will stay for just one more season as following the contract.
I got the impression that these rumors are being spread by representatives of PSG to put pressure on Mbappe (but it’s not clear due to what - the reaction of the fans maybe?). There is no confirmation of these negotiations, and judging by the fact that PSG once again announced the desired amount that they want to receive for Mbappe (250 million), this sounds like an invitation to all interested clubs (in fact, only to Real Madrid, but Real Madrid is not interested in such nonsense).
This may be a strategy of PSG management. They may be spreading rumors that Mbappe is interested in renewing his contract with PSG. And as a result, teams like Real Madrid who are ready to bring Mbappe into the squad can offer a bigger sum. And I've also heard rumors that Real Madrid management will try one more time to sign Mbappe before the transfer window closes. But it is not sure yet.
Most of Mbappe's relationship rumors are false. In the last few seasons we have seen Mbappe express interest in coming to Madrid. But every year he renewed his contract with PSG. And it won't be surprising if we see the same thing again.
Since Kylian Mbappe has been strategically retained for this season at PSG, I think Mbappe will not play at his best in every match. But PSG have done a great job by signing Dembele, I think Dembele is undoubtedly a fantastic forward.