Alvarez created a storm during the 2026 FIFA World Cup after declaring his intention to leave Madrid to join their LaLiga rivals.
Atletico held firm over not wanting selling Alvarez to the defending Spanish champions after a furious war of words between the two clubs and he remains in place in the Spanish capital.
Alvarez also kept to his position of wanting to move on, but in the end he remained in Madrid, and the situation could be revisited in 2027.
Raphinha has since boldly offered his view on the saga and claimed Atleti may have made a mistake by keeping an unhappy player.
"I don't understand what Atletico has done because if a player is uncomfortable somewhere, and I'm speaking personally, it's difficult for things to go well.
"He made it clear that he wanted to leave."
Alvarez is expected to feature in this weekend's derby clash with Real Madrid after Diego Simeone indicated he's winning his fitness race.