Garnacho came through the United youth system before leaving for Chelsea last summer.
Speaking on The Good, The Bad & The Football, Butt recalled: "He signed at 16.
"I was academy manager at the time and he signed in a deal where they also signed Alvaro (Fernandez). Garnacho was always a bit stand-off-ish, he had a high opinion of himself.
"I thought he had an edge about him. And when he got into the first team - I will just say what I think because I was there - he got above his station way too quick. He got superstar status way too quick.
And that's not a former player saying they get paid too much, I hope young players get paid millions, but he got superstar status too quick and he obviously scored the bicycle kick which was phenomenal.
"Someone in that club or team at the time should have been swatting him down, and they might have been, and he ignored them. But the best thing Man United did was sell him because, forget his ability, and I don't think he is that great anyway, but I thought his attitude was a disgrace when he was at Man United.
"More importantly when he left, and if you completely disrespect your teammates and the football club when you leave, then that's it."