Even if Real Madrid could beat Man City, they don't underestimate Bayern Munich. Bayern Munich is also a strong team that has great records in UCL. Real Madrid surely can defeat them but Ancelotti must be careful with a surprise made by Tuchel with Bayern Munich. Although I am not sure that Tuchel can surprise us, but Ancelotti must prepare anything to deal with Tuchel's tactics.
It would be very naive if Madrid did that because in the end we also cannot assume that Bayern is an ordinary club, especially with the release of the Bundesliga trophy at this time, so the goal is the Champions League because it is the only way for Bayern to save their face so surely they will try as hard as possible to get good results so it is wrong if Madrid considers Bayern underestimated in the semi-finals this time.
But for now with Madrid winning against Manchester City some time ago, their probability has increased and they are the favorites in this competition.
I personally still feel that until now Madrid is the favorite for the Champions League and indeed I feel that now is the place for Madrid to get their 15th trophy.