I have never known a transfer story to be so inaccurately reported so I am not confident of my opinion, but I believe that he will stay on the grounds that he does not have a strong desire to leave. He returned to training, went on tour, played all the games, played in the Community Shield, and has said nothing, unless Pep is misleading us all.
The contract extension is unsigned, but that does not mean he wants to go to Bayern Munich. I think Leroy knows that if he went to Bayern Munich he would be under intense pessure to lift that football club from its current malaise. They have let things go too far. Robben and Ribery were allowed to play too long. Likewise Muller and Boateng. This is a football squad that has gone way past its sell by date. It's not a good time to move there. At City he is free to develop to his potential. He may not play every game, but he will have enough opportunities if he remains focused on his game.