With Gallagher rejecting a new short-term deal at Stamford Bridge, where his current terms are due to expire in 2025, the Blues accepted a £34m bid from Atletico Madrid for their academy graduate.
Gallagher swiftly travelled to the Spanish capital to complete his move to the Wanda Metropolitano, and Atletico teased his arrival on social media with a picture of the 24-year-old taking in his new surroundings.
However, Gallagher's move to Madrid is now in serious jeopardy due to unforeseen complications surrounding the transfer of Atletico Madrid striker Samu Omorodion to Chelsea, who were set to pay a similar fee for the Spanish youngster.
Negotiations between Chelsea and Omorodion have supposedly broken down due to a contractual issue, leaving Gallagher's future in limbo, as Atletico have already spent an initial €75m (£64.4m) to sign Julian Alvarez from Manchester City.
Petit "lost" as Gallagher flies back to England
The Spanish giants were therefore planning to use the Omorodion fee to pay for Gallagher's services, but the two clubs are now scrambling to find an alternative solution, which could include Joao Felix heading back to Stamford Bridge.
In the meantime, Gallagher has returned to Chelsea and is expected to train with the Under-21s this week, having allegedly been banished from the first-team facilities while the saga continues.
The Blues' treatment of the Englishman has been blasted by Petit, who told Sports Mole - with BetVictor - that he could sympathise with frustrated fans and was "lost" regarding the transfer situation.
"It's a pity for me," Petit said. "I know by experience, English players are very important for the fans, the identity of the club. This guy has been playing for Chelsea for so many years, he's been on loan to Crystal Palace, he came back and did well, and all of a sudden you tell him you have to go because you need money?
"Excuse me? How many millions have you spent for the last two seasons? I give everything on the pitch for the last two seasons and this is how you thank me?
Petit 'would not' have put Gallagher on transfer list
"On top of it, he just wanted something that every single players from outside get, an eight-year contract. This guy was expecting to be treated the same way, and he didn't receive the same message from the club. For me this is a pity.
"I'm following the news and was surprised that all of a sudden he was told to go back to London because the transfer had not been done, there was a problem, I don't get it. For me, Gallagher was not the first player I would put on the transfer market. I can understand the fans' frustrations. I'm lost, I don't get it."
Gallagher was one of Chelsea's most important players under Mauricio Pochettino last season with seven goals and nine assists in 50 games, but he was supposedly told that he would only be a squad player under Enzo Maresca.
The Blues were therefore only prepared to offer Gallagher a two-year extension with the option of an additional 12 months, but the midfielder wanted a long-term extension to commit his future to the club.
Gallagher is also believed to have turned down the chance to join Aston Villa and is open to seeing out his contract in West London before leaving on a free transfer in 2025.