I think you are wrong in this aspect. City have been playing two matches a week since the start of the season with the only exception being the cancelled Everton match. City will contimnue to to play two matches a week until the demostic season ends in May.
The away Leicester match is late afternoon on Saturday and the home Borussia Dortmund match is Tuesday evening. That is a decent interval for players to recover.
I think that there will be rotation. I expect that Stones and Dias will play on Tuesday but that Laporte will play on Satuday to gove one a rest. Walker will probably play on Saturday to give Cancelo or Zinchenko a match off. Similarly I think that Sterling and Jesus could play Saturday with Kevin De Bruyne and Mahrez in on Tuesday. Fernandinho could play Saturday and Rodri Tuesday. We may or may not see Torres or Aguero on Saturday although I see no reason why Gundogan, Foden, and Bernardo cannot play both matches.
It's a difficult balancing act. Leicester is certainly the hardest PL match left while Dortmund is probably the least daunting task in Europe. A loss against Leicester will not be terminal but one against Dortmund will be.
There will be planty of less difficult Premier League matches left to give gametime to Mendy, Torres, Aguero, and Ake