Mentally I think I'd much rather see them dealing with being knocked out of the CL as well as dropping points in the CL. They're a monotonous side. Once they get on a bit of a run, it feels almost inevitable that it'll end up with them winning 9/10+ games in a row. Plus I think, more than ever, its the one they REALLY want this season. The more little setbacks they get, the more likely it is that they'll have more (IMO)
Yep, definitely better for them to get knocked out - the extra games they'll have by beating Atletico won't be problem for a squad like theirs.
Pep will desperately want a CL to validate his status, break the 11-year gap since he last won it, and justify spending £1.5billion in 5 years. The fans will want to win it so they can continue to gloat in ignorance despite the cheating, and the owners want it to continue the sportswashing. Going out in the quarters would put the spotlight back on the whole 'project' - especially in Guardiola's penultimate season.
Atletico is the perfect opponent to mess with Pep's head, irritate the hell out of petulant twats like Sterling, Walker, Silva and Foden, and give them a physical battle that will hopefully leave them battered and bruised bruised when we play them at the Etihad.
They've already dropped 7 points in 7 games in the PL. If they go out of the CL and we win at the Etihad, that's the poorest run they'll have had in years which could derail them completely.