Yes, the situation is quite difficult for Atletico and Simeone, we’ll see how they get out of it. By the way, despite the fact that I am skeptical about Atlético in La Liga, I had the courage to bet on them getting past Inter (before the second game when Atlético was already catching up), the odds were very good - 4.1 and it seriously strengthened my multi-bet.
By the way, I already miss the Champions League final in the form of the Real - Atlético derby. And the draw worked out so that it is quite possible:

Atletico Madrid will make the top 4 this season. They struggle sometimes but they will end up winning the games necessary for a top 4 finish. Atletico Madrid can be inconsistent sometimes, but they can also be serious when they want to. Take the Inter Milan game for example. Inter had every right to win that game but Atletico refused them.
As for the Champions League, I believe Atletico Madrid will knock out Dortmund, but I don't see them getting to the final. If they meet Barcelona, they won't knock out Barcelona. PSG will be relatively easier for them to knock out but I doubt they will be able to do that. This doesn't mean they don't have a shot at making the UCL final, but it's a very slim chance for them. For the remaining teams, Atletico and Dortmund have the smallest chance of making it to the final