To an extent, the positive spin you’re putting on things is laudable, but I suspect your viewpoint is being biased by your loyalty to City.
Looking from the outside, your problems are hugely pronounced. Poor ‘keeper, flaky full backs, only Laporte is competent at centre half, your midfield plods and is now easy to cut through, your wide options suddenly look quite ordinary and the centre forward position is a major issue. You still have two world class players in De Bruyne and Sterling, although both are out of sorts. Yes, Aguero is in that bracket on paper and past achievements but his body cannot keep up anymore. You are not winning anything of note this season.
What is notable to me is how the goalposts are being shifted to avoid Pep receiving too much scrutiny. You have people in this thread talking about him doing the job of laying long term philosophical foundations. What a load of nonsense. He is the best paid and backed manager in the world and should be delivering accordingly. Truthfully, he has under achieved at City relative to the resources available. He has also done, along with the higher ups, a poor job of managing transition. If he was always looking to stay long term, then they should have seen Kompany, Silva, Aguero, etc. ending (or coming to the end) and had a proper plan of action.
He's been a poor keeper in a season where we got 100 points, nothing has changed there. Our CB's are the best they've been in years, Cancelo seems to be turning into a better LB than either Zinchenko or Delph.
Our midfield I completely agree on, very plodding and thats on Pep, his team selection there is baffling I'll give you that. I also would say only KDB is world class but our attack is still pretty decent it just needs to click, this same attack less Ferrran Torres scored 102 goals last season with Aguero injured for a large part.
Like yourselves we are nowhere near the crisis people are making us out to be. I would say a couple of tweaks from being a quite good side. A team of Ederson, Walker, Dias, Laporte, Cancelo, Gundogan, KDB, Foden, Torres/Bernardo, Kun/Jesus and Sterling is easily one of the strongest all round in the league. It doesn't have the attacking pace and power of Spurs or Liverpool but its good enough to bang in a lot of goals. The defence is much better Eddie being Eddie aside (a very average shot stopper who luckily rarely has to actually save the ball).
I wouldn't say Pep has underachieved, I believe in 4 seasons he's had 3rd, 1st, 1st, 2nd. He's failed in the CL big time but in the prem he's been good, though that said failure this season and 2 titles in 5 and his grade goes from a C to below an F. Its a big season for him. Along with midfield I will also completely agree with you on handling the transition, its been completely botched but I don't feel to the level people think. With regards Kompany, I think he had blind faith in Stones and Garcia which turned out to be a disaster. The reailty was last season we had Otamendi, Stones, Laporte and Garcia as CB's, he only plumped for Fernandinho after he realized the others couldn't cut it without Laporte but the squad had 2 players per position. With Silva he had both Gundogan and Foden so again well covered, Kun is the big one as he's always injured and Jesus can't be the only striker.
For me the big issue with our transition is losing guts in the team, of all Pep's signing (our signings during his time whoever made them), there are too many players with lots of talent but not willing to run through walls. Only Bernardo, Jesus and Dias seem like real fighters. Walker (literally only pace), Mahrez, Gundo, Rodri, Laporte, Cancelo, Ederson are all lacking a will to win, not players I'd like to be in the trenches with. Thats on Pep and the recruitment team though, too many who are soft when the going gets tough. I will also say Cancelo has been turning it around since the covid break so I have hope for him (preferably at right back with a new LB)
If we win our next two and get something from the derby, once all their tales are up, I'd be genuinely surprised to see us lose before the nightmare February/early March we have coming up. To sum up and apologies for the novel we're never gonna have the team of 2 years ago back, thats pretty obvious. Gone are the days of 100 points and sweeping the big teams aside. But our team is still more than good enough to win the league and I'm still optimistic we will once we click up top.