The degrees of it will depend on how well the team are performing,
Pep still managed a domestic treble in his final season at Bayern despite having to admit in the December he was leaving at the end of the season - Pellegrini got to a Champions League semi-final and won the League Cup.
You certainly don't hand Pep another £20m, one-year extension, if we then have to hand him it as a pay-off next summer because he's come up short again (depending on your definition of that) - and City have made an unnecessary rod for their own backs.
It makes complete sense just to keep a rolling review, manage the team and part with a handshake of mutual respect if it then needs to be the case.
Neither side would want to be seen sacking Pep Guardiola, too much love and respect on both sides.
Pep's duration on his contract is actually perfect as it stands. It affords flexibility for both.