Luka Modric did his smart decision because by staying at Real Madrid, he will have opportunities to win one or two more Champions League titles. With Mbappe next season, Real Madrid will continue to be one of strongest and most competitive teams in Champions League and might win it again. Playing 5, 10 or 15 matches as a substitution, it's not matter if at the end, he will lift Champions League trophy again.
I can't deny that Modirc is one of the best players that Madrid has ever had, for me he's one of the players that won't be moving on to the next season, I think Ancelotti will continue to use him when there are problems in games, because his experience makes everything flow Easier to look for goals, however I agree with what you say, for me Carvajal will be the captain of Madrid, not for nothing, but the work he has done in Spain was crucial, especially in the game against Germany, he blocked many passes that were goal-scoring, he's a phenomenal Player.