Well, we're all assuming thins, that's the fun part in those transfer discussions, isn't it?
Obviously nobody knows what's really going on so we can only talk about what's probable.
Drawing my own conclusions from the information out there, I think the most likely scenario is that Dortmund extended the contract last season for a better salary but promised Sancho that they would let him leave for a certain fee if the move is agreed at a certain deadline. So they were open for a sale at their conditions but not really open for negotiations (120m at August 10, take it or leave it). Sort of like a "get-out clause lite". Sancho himself was also open for a move but given the Covid situation didn't push for it since he can also observe things for another year and get a higher contract when the market has recovered.
But as you said, it's all speculation. We'll see how things turn out but as far as Dortmund have leaned themselves out of the window, I've difficulties imagining that this will happen this season.