Joselu is quite an old player in Real Madrid standards and the fact he is playing several matches and scoring many goals is enough for them to recruit him permanently. The player didn't start as a star in England but has evolved positively since then. He knows very well his future in Real Madrid and he is aware that he will remain a substitute in difficult matches and potentially playing in Copa del Rey and other less interesting matches mainly. Well obviously he might participate in more serious games in case of injuries or unavailability of the other players.
Well considering that he is 34 years old player with not that much option to go, sticking with Real Madrid seems to be his best option. He might not really make it as a starter in most of the games considering that Mbappe would literally take up his spotlight but anyone with a sane mind would be sticking with Real Madrid if the club wants them though. Generally speaking, there isnt any team out there that is as good as Real Madrid when it comes to winning trophy so yeah