Speaking on The Rest Is Football, the pair - alongside former Man City defender Micah Richards - identified the potential issues for Pep Guardiola's struggling side, who have won just one game in 10.
"One win in ten now. Nothing's happening for them, they've just lost their mojo at the moment completely" Lineker said.
Richards added: "I was at the game, and you know when you watch it on TV you look for certain things or something a big different. I believe they're doing ok with the ball until the final third.
"When we talked about City in previous seasons, they'd keep the ball and then find a way to score.
"When Kevin De Bruyne played it through to [Erling] Haaland, previously, he would have scored that and they might have gone on to get a second and the third."
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And while Ilkay Gundogan suggested his side may be lacking in confidence after their 2-0 loss at Juventus on Wednesday, Richards doesn't think that's the case.
"I wouldn't say it's confidence by looking at them," he said. "Teams are setting up differently against them.
"[The teams] are saying 'ok, we know they've not got the legs as before, we're going to target that area, sit a little bit deeper and hit them on the counter attack because they can't deal with it at the moment.
"I think it's at both ends. They're not scoring and they're conceding a hell of a lot of chances. Sometimes, in previous seasons they could get away with that with Kyle Walker's recovery pace. At the moment they just look too easy to play against".
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Lineker then added: "Since the start of November, they've conceded more goals, 21, across all comps than any other team from Europe's big five leagues. I never dreamt in a million years that you could say something like that of a Pep Guardiola side."
Man City sit 22nd in the Champions League table, just one point off the elimination zone.
They have two games after Christmas to claw themselves firmly into the play-off places.
"Can you imagine if they didn't make it through to the next round and they got eliminated?" Shearer asked.
"They've got Paris Saint Germain next, away. What a story that would be if they got knocked out."
Speaking on what has changed about Man City in recent weeks, Lineker also theorised about what was going on.
He said: "That energy to win the ball back immediately when they lose it, the high press, that dynamic press they do, trying to win it back within five to seven seconds, being all over you, I don't see that at the moment.
"There's a lot more space in midfield, obviously we know Rodri's not playing which is a big miss, but obviously it will be in their head a bit.
"We know what form's like. They've lost that spark and the energy levels have dipped.
"I saw Pep talking in his press conference and he said it's a [bad] patch, but how they've played so well in the previous six seasons is more interesting and fascinating how they've kept it going for so long. A bad patch is much easier to explain".
Whilst Guardiola insisted his side will come through their rough patch of form, Lineker added that it was an 'interesting test' for the manager.
"This is a different kind of test", he said.
Shearer said it was the 'lack of legs in midfield' which was most alarming to him.
"The recovery is one of their biggest issues, with Bernardo Silva and [Ilkay] Gundogan, you're lacking intensity," he added.
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Man City face PSG at the Parc des Princes in January for their penultimate Champions League match, before hosting Club Brugge at home.
They also host Manchester United at the Etihad this weekend for Ruben Amorim's first Manchester derby before a tricky trip to Villa Park to face Aston Villa the weekend after.