~
The reason why they sacked him was because Bayern Munich wasn't playing up to the expectations of the club board and the necessary steps they feel to tackle the issue was to actually sack him as a manager because if it comes to player, I think Bayern Munich already have all it takes when it comes to players to actually make things work so firing him and employing kompany is the next step, now it's just left for it to actually work out.
The real deal is that the Bayern bosses said Nagelsmann is a long term project and he will get the time he needs even when it is not looking all that good. They said they signed a young super talented coach like him on purpose because they want to develop a team over time and they are convinced that he can do it within several years. It was the decision by 2 Bayern bosses who shortly after got fired themselves and the former bosses now call it a mistake publicly that Nagelsmann was sacked.