It is not only because of the return of KDB, City usually get stronger when the season is approaching the run-in period and that's what is happening now and it is scary for the rest of the league. With Haaland, Stones and Akanji all set to return soon, City would soon be able to boast of a complete squad and they'll be ready to defend their crown.
Having said that, let us not forget about Liverpool who are going about their business without any noise or fuss, too many people didn't consider Liverpool at the start of the season, but now they are taking them serious and IMO if City don't win the league, Liverpool will.
This is true sometimes but not applicable in all situations, they win that match because Newcastle was weak and they are also trying to trying to save their home from Manchester City humiliation. Newcastle was even the first team to retaliate with a goal after Manchester city gave lead them with one and then added another goal to lead with 2 goals but Rodri balance the game when they are just about to go for 15 minutes break.
Manchester city is clearly trying to get ahead of other teams just like they did last season. If Liverpool loss any match from henceforth, they will become even with point and I don't think Liverpool is ready for such humiliation, they are going to fight because even Manchester City squad are not that completed to achieve that on their own. It might took Haaland another 3 weeks before he return fully for the club and matches would have been played before then.
I don't think its because Newcastle appears weak, but because Manchester City performance has started to improve. You can see when Newcastle took the lead in the first half with 2 goals, this is enough to proved that Newcastle is not a weak club and Kevin De Bruyne made his contribution by contributing 1 goal for Manchester City. So Manchester City are still quite confident with their current performance when playing away games, Manchester City is starting to become the strongest again and is more ready to fight for the title this season and defend the title over the last few seasons.
Yes, the competition between Liverpool and Manchester City is getting hotter because Liverpool also want to break Manchester City dominance in the last few seasons and they are also ready to compete for the title with their performance being quite consistent to date. Liverpool will take advantage of the situation when Manchester City is still lacking stable with Haaland not yet at the club.