It's true Real Madrid was still able to win Champions League and La Liga without Mbappe, but they still have Kroos and Nacho.
Real Madrid have Mbappe, but they lose Kroos and Nacho, is Real Madrid become better? nope, Kroos is Real Madrid's play maker, losing him give really a big impact to the performance.
I agree with you. Real Madrid performed well last season. Real Madrid team won two important titles of La Liga and Champions League. Each of Madrid's players performed well in their respective positions last season. The squad had two key players like Nacho and Toni Kross. And thanks to Kross' excellent performance, Madrid's midfield was stable.
Both Vini and Bellingham performed well last season. These two players scored a lot of goals. But this season, Madrid have a talented player like Mbappe in their squad. But so far we haven't seen a good performance from Mbappe. Whether he will be successful with this team is yet to be said for sure. If Mbappe doesn't perform well, Madrid's performance this season will be erratic.
Now Modric is replacing Kroos's position, he's not as good as Kroos, but he still decent. In the next year Modric high likely will retire, it's really a big problem for Real Madrid.
Modrich was a very talented player. But at the moment it is not possible to keep him in the starting XI of Madrid Luka Modrich is now 39 years old. It is very difficult for a player of his age to last 90 minutes on the field. So Madrid do not yet have a suitable replacement for Kross. But since Ancelotti is an experienced coach, maybe Madrid can stabilize their midfield with Ancelotti's help.