The Catalan coach's decision brought some stinging criticism, particularly from Sky pundit and former Manchester United captain Gary Neville, who believed Guardiola should have offered the chance of a matchday experience on the bench to one of City's many talented academy prospects.
Foxes manager Claude Puel hopes the Mahrez saga is now over.
While the pre-match headlines were about Mahrez, Sergio Aguero ensured he dominated the post-match ones by netting four second-half goals after Jamie Vardy had cancelled out Raheem Sterling's early opener.
The day belonged to Aguero, though, and he rounded off the game with two superb strikes.
Anyone who knows Riyad will know the ability that he has got, and he'll be bitterly disappointed not to have been able to go to a club where he could potentially win four trophies this year, and I think everybody gets and respects that.
Vardy has scored in each of his last four Premier League games, his longest streak since his record 11-game run in Leicester City's title winning season.
It is hard to determine which would be sweeter for City supporters. He loves to touch the football but he needs to come back right.
Being held by Burnley was certainly not in the script, coming after defeat to Liverpool and a goalless draw at Crystal Palace in their previous away outings, and City must also face Arsenal and Chelsea in quick succession in three weeks' time.
The next penetrating pass from the boot of De Bruyne came in the form of a low through-ball behind the defence into Aguero's path.
Moments later a weak clearance from Schmeichel was ruthlessly punished as a clinical City move culminated in De Bruyne's third assist and a fierce finish angled shot which the Leicester goalkeeper got a hand on but could not prevent going in.
The Algeria worldwide had seen a proposed deadline day transfer to the Etihad Stadium collapse after the Foxes rejected City's offer.
The Algerian winger was bizarrely cheered by both sets of supporters.
First, he capitalised on another poor clearance from Schmeichel and lifted an audacious chip over the Dane, then late on struck a powerful effort from just outside the area which bounced in off the underside of the crossbar.
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