I've not seen much of him in the German team but sounds like he is asked to play a different role to the one at City and has not sparkled in it. Even so, quite why you would not want to take such a talent in your squad when he is a player that could come on and turn a tight game in your favour is not easy to fathom. He's a player who you would think could get into every other squad in the tournament.
I've seen suggestions in this thread it might be to do with attitude but one thing you can be sure of is that Pep Guardiola does not play you regularly if your attitude and application is not of the highest order.
Whether or not this will work in City's favour or not is debatable, even if, as one hopes, Leory's attitude is I'll show you how wrong you were. This is a big blow to the lad and I do hope Germany do not win the tournament because I reckon coming home with a winners medal might have been better for him than a rest and any motivation he gains from being left out. I now hope the German's crash and burn early - unlikely as that may be.