The Germany international believes Pep Guardiola's men were punished for their carelessness and complacency at the Allianz Arena.
The reigning European champions appeared to be on their way to a comfortable victory early on as Muller and Mario Gotze gifted Pep Guardiola's men a two-goal lead, but the Premier League outfit turned the game on its head with goals from David Silva, Aleksandr Kolarov and James Milner.
"I think we showed our human side against City. We were too careless at times. It was not as if we gave away chance after chance, but we did not look good on any of the goals we conceded," Muller was quoted as saying on the official UEFA website. "It is no secret that City are always good for a goal, but we got off to a great start and put them under a lot of pressure. After that, we took our foot off the pedal.
"We need to get that winning mentality into our heads. Maybe it is understandable that we got a bit complacent after so many wins but we are professionals, so that kind of thing is not acceptable."
Despite the defeat, Bayern beat City to top spot in Group D due to a better head-to-head record, having beaten the English outfit 3-1 at the Etihad on match day two.