The Spain international was surprisingly left out of the starting line-up for the clash at the Santiago Bernabeu and did not get off the bench as the champions slumped to a damaging defeat.
Isco had been warming up with Marco Asensio and Gareth Bale after Barca took the lead early in the second half through Luis Suarez, but head coach Zinedine Zidane was forced to bring on defender Nacho Fernandez when Dani Carvajal was sent off for a deliberate handball and Lionel Messi made it 2-0 from the penalty spot.
Some sections of the Spanish media claimed Isco stopped warming up and headed back to the bench after the decision to bring on Nacho, with Zidane later turning to Bale and Asensio in a bid to snatch a result before Aleix Vidal's late third goal.
Dejar de meter mierda que ya iban a salir mis otros dos compañeros... no sabía yo que sé podían hacer 4 cambios https://t.co/CFnYgNZcbM— ISCO ALARCON (@isco_alarcon) December 23, 2017
Isco, however, has taken exception to the suggestion, insisting he only went to sit down when his two attacking team-mates were preparing to go on.
Taking to Twitter after the match, he wrote: "Stop spreading s*** my two team-mates were about to come on... I didn't know we could make four changes."
The defeat leaves Madrid 14 points behind league leaders Barca, although they have a game in hand.