No it doesn't. You're somehow ignoring the squad spots issue - we can't sign any reinforcements until the space is freed up. And players with expiring contracts (Kun, Dinho) will be the first on their way out, that's how City function
I'm going to dig my heels in a bit here and say no, that isn't how City function.
City don't get rid of high quality players just for the sake of freeing up space and wages. Especially since Pep arrived.
When Pep arrived, he quickly moved Touré to one side because he was overweight and unfit. He would have been an easy candidate to let go because of his huge wages and ending contract. But in mid-season he got his act together, had a strong finish to the season and got an extension, presumably on big money still and continuing to take up a place in the squad.
In 17/18, I think in the Amazon documentary, it was shown that the club wanted to offer Fernandinho a shorter deal because they weren't sure how his legs would last. Fitness was the only issue.
In 18/19 there were strong rumours the club was going to let Kompany go at the end of the season. His injuries and fitness problems meant he couldn't be relied upon and it was up in the air as to whether the club would be willing to handle it. It was believed that they'd see how the season panned out, much like Aguero now. He turned out to be a great asset in the end of that season and the club wanted him to stay after all (although he left anyway).
Last season, Silva left. But it was only because he couldn't reliably play multiple games a week over a season. So it was mutually decided that it was best to part ways. Like Fernandinho now. It was never a question of quality and it was never about freeing up space. Because I'd bet my bottom dollar that if Silva was as fit as he used to be then not a single person at the club would have let a player of that level go.
This season, with Fernandinho, it's the same as Silva.
So with Aguero, I'd say it largely does come down to fitness. Unless he's magically lost his ability (which I guess is plausible with the injuries), a fit Aguero that can be relied upon over a season is still a truly top class goalscoring player. The club would not let him go as there would be no need to bring in a new player to replace him.
I admit as I said in my original post, his age, contract, and injury history make him more easily expendable. So if the club were bringing in both Haaland and Messi, then yes he'd be one to let go. But those two are exceptional players that go beyond City's usual MO with signings.
So no, City don't move top older players on for the sake of freeing up space, that is not how the club operates. The club has recently only signed players in positions that need filling in, and usually the players they are replacing are either not good enough (eg. Clichy), too old (eg. Silva), or left on their own volition (eg. Sané).
Both Touré and Kompany have established the precedent that if you show that your both good enough and fit enough, the club will want you to stay on. Besides, if the club were letting Aguero go, we'd know by now. Like how we found out early with Silva and. Fernandinho.