I agree with you that Manchester City is playing weaker football compared to the one they played last season. Last season, Manchester City's performance was amazing, and they scored a lot of goals against their opponents, which helped them win the Premier League trophy last season. Since Manchester City is struggling to score enough goals against their opponent, that doesn't mean that Liverpool has a higher chance of winning the league, because if Manchester City fails to overtake Liverpool in the league table, Arsenal will do that.
This is quite a big change for Man City due to the absence and injuries of several key players from the start to the middle of the season. Indeed, no matter how strong a club is, if their key players are injured, it means their strength will be very vulnerable to dropping. Even though they may have quite capable players, they still won't be as good as their main squad. Moreover, this is the EPL where competition is very tight between the clubs. Many of the top clubs in the world are in this league. So there is no doubt that if it is not in optimal conditions then the clubs will take over each other.
But fortunately, since De Bruyne returned and the main squad has all improved, Man City's performance has improved quite a bit, even though it's not as amazing as last season. Indeed, compared to last season, his performance has decreased quite a bit. However, what is certain is that we will see in the future whether they can defend their title or not. Because after all, the competition in positions 1-3 is very tight and only 1 point away. So it is still not certain who will take the first position until the end.