On paper, Real Madrid looks weaker than Barcelona (especially after two defeats against Barcelona this season) so I don't think Real should be considered favourites. PSG is good, they have a very even squad, no weaknesses, but they still had big problems in the group stage, so the fact that they are rated higher than Real is absurd. All teams (except Liverpool haha) had problems, but why is PSG higher?
Perhaps the bookies' reasons for favoring Barcelona over Real Madrid? Because we know Real Madrid have been battered since they met Barcelona.
But somehow I will still consider Real Madrid as the favorite because they already have the mentality for this tournament despite the many twists and turns they have gone through.
Why is PSG higher? Because they have a consistent performance after going through the group stage.
I am not surprised if Real Madrid is not favored by bookies this season, it is true because Real Madrid's performance is still below Barcelona, especially this season Barcelona has beaten Real Madrid badly.
But let's try to learn from previous seasons, isn't Real Madrid always not favored by bookies to win the UCL title? Even in the last few seasons, Man City has always been on top as the favorite team but in reality Real Madrid can win the UCL title.
Likewise this season, even though Real Madrid is below Barcelona, it is not a benchmark because as you said. Real Madrid when playing in the champions league competition their mentality is much higher than other teams, they even never give up before the whistle ends, that's Real Madrid. PSG this season is better and can make a surprise, we'll see how long they can survive in the Champions League.