The midfielder was in contract talks with Bayern before withdrawing and declaring his desire for a new challenge.
“If he wants to try again in the Premier League now, I totally understand. But it would be a shame because Thiago gives our game that certain something.
“That's why I would like to have him as a coach on the team for the next few years, but that's life. It would go on."
With attention turning to a replacement for Thiago if he departs, Flick declared: “I'll discuss the squad planning with Hasan Salihamidzic and his team. We are in close contact.
“Currently the focus is only on the Champions League. I therefore do not want to submit any water level reports."