It seems the rumor about Xabi to join Real Madrid is just getting even real. This is because Ancelotti has reached principal agreement to coach Brazillian team. Happy with him gets a new club, and will also play in the world cup 2026.
I know his time in Real Madrid is almost coming to its end, and most probably used everything to help his club to win La Liga. Although it's very difficult to make it happen, he still has chance to make it as his last moment.

I don't think he will come back someday considering how old he is. It seems this is his last moment in his beloved club, Real Madrid.

Best of luck Ancelotti. You have done great jobs, though ended in the bad way.