I think it's just a rumor and usually this could happen, but in fact Carlo Ancelotti doesn't want to leave Real Madrid and still wants to be at the Santiago Bernabeu longer. It is possible that when his contract ends, he will think about his future as a coach, whether in the Brazilian national team or another team. What is clear now is that Carlo Ancelotti only wants to stay at Real Madrid and rejects every offer that comes his way.
Ancelotti is a professional coach and he works with his best for any club he manages. He has very few reasons to leave Real Madrid to join Brazil national team that have many problems now. He will leave Real Madrid and even can retire his coach career but leaving now just to join Brazil team, is not possible.
I think if Ancelotti wants to manage a national team, he will aim at his national team, Italy, not Brazil or other nations. Spalleti was appointed as Italy coach months ago and it seems Ancelotti will have to wait for a long time to get opportunity to manage Azzurri.
There is no doubt about Carlo Ancelotti's love for Real Madrid and the various titles he has won, but he feels that his journey at Real Madrid is not finished and must continue immediately. As a veteran coach who has a lot of experience at various top European clubs, I think it is a blessing for Real Madrid to have a coach like him.
I don't think he has big love for Real Madrid but he has enough professionality to complete his job well. He has enough experienced to deal with star players and also satisfy demand to have beauty football for Real Madrid from their President Perez.