Real Madrid is a team that can perform consistently and in the matches that matter to them, they perform much better than expected. If expectations aren't high for Real Madrid this season, expectations won't be high for any other team.
I think the Spanish Super Cup final was also an important match for Real Madrid, but their performance was far from expectations. Even though Man City is in a bad period, it doesn't mean they can win the match easily, especially before this match takes place, Madrid has to face Atletico in the continuation of La Liga. Real Madrid performance depends on the strategy carried out by Ancelotti because the players' energy will be drained in the Madrid Derby to fight for first place.
Both Real Madrid and Manchester City, they both still have problems that greatly affect their game, so I think this is still a 50/50 chance for both teams that will compete. Although I see Real Madrid slightly more favored, but still it is not a guarantee that they will be able to win easily, just like you said. Maybe in the end luck will be the deciding factor for both teams, which will determine who can win this match.
With the conditions of the two teams that are not much different of course they have the same chance to lose, draw or win in the match, so I think besides luck of course the coach strategy will be the most important factor in supporting one of the teams to win in the match later, but I personally tend to see if the two teams might end the match in the first leg with a draw, regardless of who might be the winner in the second leg and qualify for the last 16, somehow I'm pretty sure that one of Madrid or Manchester City will be a serious contender for the championship if they make it to the knockout phase later, because I see the bad conditions they have experienced so far often do not affect their mentality when they are crucial matches in champions league .