I wouldn't also expect Simeone to be afraid of an earlier challenge against such title contenders. Atletico Madrid have already played a lot against Real Madrid with Simeone. He knows how to play against Real Madrid to increase their chance for the semi finals. They already beat Real Madrid twice this season which should be also taken into account. 
When it comes to Manchester City they are also a team that Atletico Madrid faced in the Champions League like two years ago. I remember how much Manchester City struggled about eliminating them. It was like 1-0 on aggregate.
Therefore Atletico Madrid don't need to be afraid at all.
After seeing Atlitico Madrid succeed in getting rid of Inter Milan, I have no doubt about Atlitico Madrid's ability this season in the UCL League, they will be ready to face any team. Because Inter Milan is not an easy team, we know that Inter is a very strong team this season, in contrast to Atletico Madrid who are inconsistent, especially in the domestic league, but they managed to beat Inter Milan which was truly extraordinary. Of course, this victory makes Simeone have confidence in the next round, whoever his opponent is, even though he has to meet a team challenging for the UCL title.When it comes to Manchester City they are also a team that Atletico Madrid faced in the Champions League like two years ago. I remember how much Manchester City struggled about eliminating them. It was like 1-0 on aggregate.
Therefore Atletico Madrid don't need to be afraid at all.Because Atletico Madrid actually has a good squad, but lacks consistency, it has proven capable of beating Real Madrid twice this season. Of course, in the UCL League, Atletico Madrid must be considered a team capable of surprising the favorite team. I personally really hope that Atletico Madrid meets Man City in the last eight, because sometimes Atletico Madrid's tough play makes the match even more exciting with its players acting to provoke their opponents and it is not impossible that Man City with its luxurious squad will be eliminated by Atletico this time.