City conceded three penalties, but none of them were as controversial as the ones that cost Tottenham and Crystal Palace to spark more debate over the new interpretation of the handball rule in the Premier League.
Champions Liverpool are not in action until Monday when they host Arsenal, but on top of City's collapse there was also little to fear from what Chelsea and Manchester United showed on Saturday.
AFP Sports looks at three things we learned from the Premier League weekend.
Hand-wringing over handball
The Premier League's adoption of a new interpretation of what constitutes handball is causing consternation just three weeks in.
Tottenham and Palace were the big losers this weekend, but there is already a consensus among coaches that something needs to be done now to prevent farcical scenes from continuing all season.
Joel Ward was harshly penalised for Everton's winner in a 2-1 victory at Selhurst Park leaving Palace manager Roy Hodgson despairing for the game he's been involved in for over 50 years.
"I find it very disappointing that the game I love and believe in is being reduced to this level," said Hodgson. "I have despair about a rule that I believe is ruining the game of football."
Hodgson has support in Newcastle boss Steve Bruce, even though his side benefitted to snatch a 1-1 draw at Tottenham thanks to Callum Wilson's 97th-minute penalty.
"I can understand why Spurs will go berserk and Roy Hodgson reacted like he did. It is a total nonsense," said Bruce. "We should be jumping through hoops, but I would be devastated if that was us."
No case for Man City defence
In his 686th game as a manager with City, Bayern Munich and Barcelona, Guardiola was hit for five as his side collapsed when faced with the pace and cunning of Jamie Vardy on the counter-attack.
Vardy scored a hat-trick to take his tally to nine in five seasons against Guardiola's side, leaving huge question marks over City's title challenge.
Despite the signing of Bournemouth centre-back Nathan Ake, City looked even worse at the back than last season as Kyle Walker, Eric Garcia and Benjamin Mendy all conceded rash penalties.
According to reports, Benfica centre-half Ruben Dias is heading for Manchester, while Aymeric Laporte's return after testing positive for coronavirus will come as a huge relief.
But the arrival of Dias could take Guardiola's spending on defenders alone at City to £400 million.
The Catalan has been unable to get the best out of John Stones, Joao Cancelo, Mendy and many others and the pressure is on him to turn to his coaching, rather than just the club's cheque book, for solutions.
Chelsea, Man Utd far from challengers
Chelsea's huge investment in the transfer market and Manchester United's fine Premier League form since the January window closed had led to hopes of a four-way title race this season after three years of dominance from Liverpool and City.
However, on the evidence of the first few weeks, Chelsea and United remain far from challengers.
Frank Lampard's Blues should markedly improve once they have all their new signings fit and bedded into the team, most notably in goal with Edouard Mendy not involved for a 3-3 at West Brom after completing his move from Rennes on Thursday.
But Chelsea still have problems to address in defence, where 36-year-old Thiago Silva's form raised questions whether the Brazilian can be the solution at centre-back.
United escaped with all three points thanks to a handball penalty awarded after the final whistle at Brighton to win 3-2. But even Ole Gunnar Solskjaer admitted his side barely deserved a point, nevermind three, from a game in which Brighton hit the woodwork five times and were unfortunate to see a penalty overturned on a VAR review.
There are also extenuating circumstances for the Red Devils after a short pre-season, but they too remain leaky at the back with no sign of a new left-back or centre-back just over a week before the transfer window closes.