City led 1-0 at half-time at the Hill Dickinson Stadium through Jeremy Doku's first-half curled strike and were in command of a game they had dominated in the opening period.
Three Everton goals in 14 second-half minutes — two from substitute Thierno Barry and a header from Jake O'Brien — turned the fixture on its head before Erling Haaland and Doku's 97th-minute equaliser salvaged a point. The final score was 3-3, the draw meaning Arsenal — who have a home game against Manchester United and a trip to relegated Ipswich among their remaining fixtures — now control their own destiny.
Guardiola was direct in his post-match assessment.
"It's better to have a point than no point. It would be better to win the game than have the point. Many things happened. We know the difficulty of the opponent — they are incredibly aggressive. We were there in the first half and exceptional, then in the second half they made a step up. We played with good process but maybe not the intention we had in the first half."
He identified the sequence of events that unravelled City's lead.
"We gave away the first goal, then from the corner they are so good — David Moyes always is with set-pieces. It was open to transition and we had chances. We had momentum and two goals, the third was outstanding. We take a point."
On the title race, he was unvarnished.
"It was in our hands before this game but now it's not. Prepare for Brentford. We will continue and see what happens."
Guardiola praised the character of his players for coming back from 3-1 down while also acknowledging the errors that led to that position.
"When you score and have the momentum, you have to win the game given the situation and how many games we have left. With the long balls they are better, they win free-kicks and throw-ins. You make some decisions a little rushed, which is normal because of the emotions, but at the same time without that emotion you cannot come back. If you give up, you cannot do what we have done."
City made eight changes from their FA Cup semi-final victory at the weekend, and Guardiola's rotation decisions will face scrutiny in the aftermath. They face Brentford on Saturday before the season's final game at Old Trafford against Manchester United.