Considering the performance of Manchester City against Tottenham in the Premier League, Manchester City cannot be considered as a favorite team in the Champions League. They did not perform well at all last season in the English Premier League and the Champions League, if we take the players who were in their team last season, their club has the same players this season, so there may not be a significant change in performance from Manchester City.
Just after playing with Tottenham and couldn’t win the match? You must be kidding right? At least ten matches needed to have being played in this new season before we begin to rate this teams and their performances on how it’s going to be going forward in the champions league and even in their domestic leagues. The premier league is more important to Tottenham now than the champions league because they believe they may not go far there, and focusing on competition that will pay them the more will be were their focus.
Manchester City's exclusion from the list of favorite teams means the exclusion of a strong team, which will increase the chances of other teams that are there to perform well in the Champions League. Although Manchester City is not considered a favorite team for the Champions League, PSG, Liverpool, Real Madrid, Inter Milan, Bayern Munich are all considered favorites.
What makes a team to be called favourites? I don’t think those teams you’ve mentioned have something so special about them that they’ll be called favourites and Manchester City won’t be called one. One match cannot be used to check the performance of a team, so those teams also have to prove they’re worth of been called the favourite after playing more matches.