I don't think Leroy Sané will extend his contract with Bayern Munich because it was stated before the end of last season that the club wanted to extend his contract, but it seems like he is not happy at the club. Sané performance was not that bad last season, it is only that he lacks consistency. Bayern Munich has signed another left winger to strengthen their game, they did not get the results they expected last season, and Sané playing time will be reduced next season.
There is no reason why he doesn't want to extend his contract at Bayern Munich because he will meet his former Manchester City teammate Vincent Kompany where he will be coach. I'm sure they still have good chemistry and will make the player more comfortable, but the club haven't proposed a new contract extension yet maybe if Bayern proposes the player will be happy to sign the contract he is also not too old. In my opinion he is a good player with the performances he gave last season he scored 8 goals and 11 assists in 27 appearances in the Bundesliga what what made Bayern Munich doubt him? I think he can still help Harry Kane up front.
Also, there seems to be no rumors about other elite teams having an interest in signing Leroy Sane, and with factors like that it seems like it would be the right moment for Bayern Munich to extend Leroy Sane's contract which only has one season left. Moreover, Leroy Sane is also still 28 years old and of course it is still very feasible for Bayern Munich to extend Leroy Sane's contract at this moment.
Because if Bayern Munich do not extend Leroy Sane's contract at this moment, then next season Leroy Sane can leave with a free transfer fee. So yes, I also agree about the past between Leroy Sane and Kompany at Manchester City, because then it will likely make it easier for Leroy Sane to accept a contract extension at Bayern Munich. But even so, I also don't consider it a certainty, because any decision can happen.