I think by looking at the current situation with Mbappe renewing the contract but with some rumors saying that he will leave next season because this is part of their 1-season contract deal this actually indicates that Mbappe will leave regardless of anything he will not stay at PSG.
He has good potential for his development especially with his current young age so he has a lot of hope to develop and indeed this will not be able to get in Ligue 1 even if he is at PSG.
There must be a bigger competition than Ligue 1 to make him develop more because even though Ligue 1 is one of the best competitions in Europe but its prestige is still less than La Liga or EPL so indeed Mbappe will not be able to develop further.
Talking about Madrid, the option is still there, it's just that we are now only speculating because for the fact that it happens or not it will only be seen next season whether Madrid will prepare again in the hunt for Mbappe or not because last season Madrid was actually quite passive and just waited it.
Madrid has become the main target by mbappe this time. he is looking for a club that bring him to the UCL trophy, Mbappe has won world cup trophy but he never achieves UCL trophy. real madrid will become the only great team for him this time.
I don't even try to mention other teams from EPL caused by the chances owned by those clubs to get mbappe is pretty small this time. Mbappe itself is always showing interest to join in the real madrid at this moment.
Even madrid has been trying to wait him till next year. This proves that if real madrid has been showing real commitment toward him. That's why mbappe is now willing to leave from PSG without free agent status.
Having free agent status will make him much easier to join in the real madrid as a player. Im waiting for mbappe to wear madrid's shirt.
The hype is so big once he will move there.
I will not say whether Madrid is the goal or not for this time, it's just that I think for PSG it will not be able to accommodate the wishes of Mbappe and there needs to be another club.
If in the end he will go to Madrid, of course this will be very good because after all Madrid is one of the biggest clubs and subscribes to the Champions League especially with the record that Madrid currently has I think this will be perfect for a Mbappe.
But we cannot immediately say this for sure because there could be other scenarios that occur when Mbappe leaves even though Madrid can be at the forefront at this time but if you are too sure this will also cause disappointment if Madrid cannot bring Mbappe like 2 seasons ago.