Who's talking about knocking teams from the Champions League competition? Every manager keen on holding firm ground and focusing on winning the title because it's the ultimate important to everyone, Pep Guardiola and Carlo Ancelotti are experienced. Manchester City and Real Madrid are both great teams, having the basic necessities of winning matches with ease efforts. Revenge? There's no such thing because elite teams will continue to fight to become the best in the UEFA Champions League this season.
I also don't think that the meeting between Manchester City and Real Madrid in the Champions League this season is an event for revenge because it is true as you said that every elite team has a specific target to be able to win the match in order to get the Champions League title this season. For now, I still think that their match will both have enough tension so that everyone might not just miss their match. Because that will be quite interesting to watch this season.