Then tell me which team other than Liverpool has been able to perform optimally. Manchester City is out, Real Madrid had to play the playoffs, Juventus Turin is out, Atalanta is out, AC Milan is out… there are a lot of clubs that haven‘t played optimally, which makes it quite a level-playing field. Liverpool is the favorite this season, but I think a lot of teams have chances.
Seriously speaking, this season champions league is complicated with the kind result we've been witnessing in every game week and it doesn't matter whether you are performing optimally or not. Most predicted favourite teams are struggle and end up playing in the play off and still the assumed weak teams eliminate the supposed strong teams. Bayern Munich hasn't been in their best form but they're not doing bad in both competitions compared to other teams that have been eliminated. Liverpool seems to be the only phenomenon club with a good and clean record but it is hard to conclude them as the favourite team to win. Just like you said, every team has a chance at the moment until they're being eliminated.
Seeing that, it is true that Liverpool is a club that can play well and consistently, or in other words so far they are the club with the best performance in the Champions League this season. But as said, that also cannot be a guarantee considering the many unexpected things at all this season. If they can be consistent with what they have shown so far, then they will be able to win the title. And that would be extraordinary considering this season is their first season with a new coach. Of course that will make the coach's name on the wind, this is an advantage.
But the journey is still very long now Champion League has just entered the last 16 and also what needs to be remembered is that in football anything is possible and there are also many surprises that occur in the Champion League competition that were never expected before, Liverpool does have an impressive performance but no one guarantees that they will be able to provide or show such performance until the end of the season.
And Bayern Munich also cannot be underestimated in the Champion League competition because now they can share focus after being comfortable enough at the top of the Bundesliga standings without any pressure of course making Bayern Munich now more focused on the Champion League competition so everything is still possible to happen.