While Alphonso Davies was close to joining Real Madrid and playing for this team but this player extended his contract with Bayern Munich and he decided to stay in Germany.
Bayern Munich spent too much money to keep this player which could make any player change his mind but Alphonso Davies said he rejected the offer from Real Madrid because he thinks Real Madrid doesn't respect this player.
Real Madrid didn't spend too much money on this player and instead, they decided to pay more attention to their payler Ferland Mendy since Ancelotti preferred to have this French player. It was enough for Davies to stay in Bayern Munich until 2030.

For Bayern to make such a decision it just means they still value the player and that he is still crucial in their plans forbthe future and think it is best to commit him further than losing him to Real Madrid who happens to be a rival in the champions league. Now Bayern Munich have him signed until 2030, mind you some of this rumours sometimes happen to transfer market stunts pulled by player agents to force parent clubs to act and up offers for their clients.