Pep Guardiola has made his name as a coach who has a brilliant history as a coach at Barcelona and also as a former Barcelona player. He has contributed many trophies to Barcelona during his time as coach there. So it is impossible for him to dare to return there because it would potentially ruin his own good record there. Because being a coach at a club that has financial problems is not an easy thing. Only a handful of coaches are able to bring a club that is in financial trouble but can still win a championship trophy. And actually Xavi is also a good coach. But we know that even Xavi has to hold back to be able to get good players. Even the condition of Barcelona's front line is not good enough after Lewandowski aged and was no longer productive. So Barcelona could only borrow a player from Atletico Madrid, namely Felix, to cover this problem. And yes this is not an easy thing for a coach.
But, it would also be something that would put his legacy up there with Sir Alex Ferguson as the best managers in the world. He won a lot with Barcelona first, then won "some" with Bayern, nothing major, then he turned City into the dominating football monster that they are right now. If he somehow returns to Barcelona, the possibility of him ruining his legacy is possible, but if he somehow turns the team around and makes them win the league and the ucl within a few seasons, then it would be unreal.
The problem is that, right now at City he has unlimited money, he buys whoever he wants, they may even get punished for financial fair play regulations reasons, that's how much money they spent, if he goes to Barcelona, that team has debt, so they can't get anyone he wants and could be a trouble.