This will obviously be done because it will be very difficult for Madrid when losing some of its senior players, especially 2 of the 6 players who can be said to be their most senior have decided to leave where Kroos decided to retire and Nacho went to Qatar.
With Modric staying for one more season, it is indeed a very good thing for Madrid in the end because regardless of anything although his role in Madrid may not be as intense as before where he was always a player in the midfield but with just his presence in the squad it is very good.

Modric can be an alternative and an option when Madrid rotate but on the other hand he can still be in the core squad but he might be one of the players who won't be on the pitch for too long, not that he's bad because he's a legend but this is so that the young players have more flying hours.