Levy is like a gambler who is down big yet instead of walking away is thinking about selling his fancy watch for a chance to get back to even. I bet he can't get out of his head the possibility that if they keep Kane one more year, then maybe Postocoglou has a magic effect on the squad, and they either make CL again or win a cup, and then Harry signs a new contract and stays there for life, which vindicates Levy in the end and also allows him to keep monetizing that Kane commercial gravy train, etc etc etc.
If Real Madrid offer enough, he'll get over it but I think its probably a real factor in his thinking. There is an
entire strand of behavioral economics about this kind of decision making.