The England international was replaced by Raphael Guerreiro early on at the Allianz Arena, where Dortmund were 1-0 down at the time and went on to lose 4-0.
His first-half exit was put down to a troublesome hamstring injury flaring up, but Favre revealed after the match it was instead a tactical decision.
"He was injured for a couple of days and could not train," Favre said at his post-match news conference.
"Yesterday he returned to training, but I think you saw he was not good enough today. He was not injured."
Robert Lewandowski scored twice against his former club in Saturday's one-sided Klassiker, while Serge Gnabry was also on target before a Mats Hummels own goal late on.
Dortmund were also stuffed 5-0 by Bayern on their most recent visit to Bavaria in April and Favre had no complaints about the manner of this latest hammering.
"I have to say that we were clearly not there," he said. "It was a very very weak performance. You saw today that it was way too little from us, way too little."
Asked if he was more disappointed with the performance or the result itself, Favre responded: "With the performance. It was far too little. We can lose today but not like this."
Thomas Muller and Lewandowski each set records as Bayern eased to victory at the Allianz Arena.
Lewandowski opened the scoring and then bagged Bayern’s third, taking his tally to 16 in the first 11 games of the season. In doing so he surpassed the record of Gerd Muller, who netted 15 times in his first 11 matches, 51 years ago.
Sandwiched between Lewandowski’s goals was a Serge Gnabry strike, set up by Muller which was its own piece of history.
The modern Muller is the first player to record 100 assists in the Bundesligasince Opta started recording such data.