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I am not sure if you got this wrong, but Manchester City will guaranteed play against either Real Madrid or Bayern Munich. How is that evoking the feeling that Manchester City would manipulate anything? If that was the case, I doubt they would have chosen these two teams to be their opponents...
It is rather that either Bayern or Real Madrid will get away with a black eye if they play against Celtic. Manchester City is screwed no matter what during the playoffs. It means one top team will be out when the playoffs are over. For City this is the hardest possible draw out of all the playoff teams there are. There is no harder draw than this. Doesn't seem like manipulation to me even if they were able to.
That's right, I got the picture wrong. And I had every reason to do so: the expression A or B versus C or D is very likely that the winner of the pair AB gets the winner of the pair CD.
Well, the actual order of the games doesn't change much, the fact that out of the three main favourites (Liverpool fans can certainly argue here) there will be only one left after the 1/8.
Whether you had "every reason to do so" is up to you, no idea whether you had. But I took a minute to read the rules on the UEFA website and found that it works the way I described.
Thinking about your statement here, it makes zero sense by the way. How would it make sense that teams that finish 11th and 12th should play against each other to find out who plays against 23rd and 24th? Where is the benefit finishing 11th if that makes me play against the 12th? You know, I think you had no reason to do so to be honest!
They included this little rule to build pairs to have a least amount of variance and an additional drawing as these drawings bring them money through advertising. They could have fixed it beforehand, but they also wanted to avoid strategic behavior on the last match day. Bayern got lucky, Real Madrid didn't. But I still think Real Madrid is the favorite against Manchester City.