Clement, who was sacked by the Swans in December, signed Sanches from the German club while at the Liberty Stadium and had high hopes for the 20-year-old's progression in South Wales.
The former manager has told The Times, however, that it was "sad" to see Sanches's lack of confidence and poor form on the pitch.
"Bayern really supported [the loan]," Clement said. "They thought he was going to a club who played football, and to a coach who would care and give him the attention he needs. [Sanches] wasn't so keen initially. He thought he was going to go to Manchester United, Chelsea or Paris Saint-Germain.
"When he came, he was far more damaged than I thought. It was really sad. He was a boy who had almost got the weight of the world on his shoulders. In training, when that pressure is not there, he was the best player.
"But then in games, I looked at the choices he was making, shooting from 45 yards on the angle, and he kept making those mistakes. He got in a vicious cycle of poor choices. The other players were saying, 'he's playing like that and you're not picking me', so it became difficult to pick him."
Portugal international Sanches has appeared 15 times for Swansea this season.