It's hard to understand what is going on with them and not it will become interesting. They extended Guardiola's contract and it would be ridiculous if they sack him weeks later, so I suppose they are going on with him no matter what's going to happen.
Sacking Guardiola will be a poor decision because this is only the first time his team has struggled this much so if the team doesn't trust him in a time like this, it means they don't deserve him. As you said, it's difficult to explain what is really wrong with them, but we have to remember that Rodri was not the only player he missed. He was without KDB, Doku, Grelish, Ake, Dias, and Stones at a certain point in this season.
I believe with a few players in strategic positions Pep can get his team back to winning ways. Players like Walker and Gundugan have failed to live up to expectation so people shouldn't regard them as top players. KDB has been too injury prone to be at top level. Worst of all, Pep's system relies on a DM and without a reliable DM they'll struggle.
For some people sometimes it feels strange when Pep's contract is extended because recently Manchester City's performance has not been as good as in the UCL and in the domestic league, but of course in my opinion Manchester City's decision to extend Pep's contract is not wrong because it is true as you said. say that Pep is currently having big problems because he always doesn't win when he competes. But of course, in my opinion, if Manchester City fired Pep, of course it wouldn't be a good thing because of course Pep's services over the past time have been very good, so yes, it would be a good decision if Manchester City retained Pep.
But yes, I also predict that Pep, even with the players he has now, will definitely have great potential to win, of course, provided that Pep really has to make a good strategy and formation and I also think his defense line will be strengthened.
However, I read the news and it seems like the news says that Pep is still optimistic about Manchester City and when he plays against Everton, Pep seems to be really serious about winning that match and of course Pep will definitely be more serious in making a strategy in the match against Everton later in EPL and according to my predictions, Manchester City will have great potential to win in the next match. Honestly, I can't wait for that match.and in the future against PSG, I also think that in the UCL, Manchester City will definitely have great potential to win
Source: https://www.ligaolahraga.com/amp/pep-guardiola-masih-optimis-bantu-manchester-city-akhiri-periode-sulit