Arne Slot fielded a second string squad in the final League Phase match against PSV, which resulted in their defeat. In my opinion, if Arne Slot had not rotated his squad, we might have seen Liverpool leading the standings with 24 points. Meanwhile, PSG had a very hard time reaching the round of 16, so it is natural that they are not the favorites when facing Liverpool. Of course, I don't mean to underestimate PSG, but on paper Liverpool are more worthy of being the favorites.
You are right. Liverpool did not field their strongest eleven which contributed to their loss against PSV, had they played their best squad perhaps the result might have been different.
I don’t think PSG is a weak club compared to Liverpool. Football is unpredictable and while Liverpool may be considered favourite in the match against PSG, I wouldn’t underestimate PSG, they are champions in their domestic league and are capable of competing against other top teams in Europe.