Muñoz left the Bernabéu last summer for €6 million in a deal that left Real Madrid with 50 per cent of his economic rights and a buy-back clause valid across three seasons — priced at €8 million this summer, rising to €9 million in 2027 and €10 million in 2028.
A deadline of July 30 applies to this summer's option.
"The point of the matter is that Real Madrid have three years of a buy-back that was already agreed," Vázquez told reporters before Osasuna's match against Athletic Club.
"When he came here seven months ago, no one expected him to get a call-up to the national team. We're going to enjoy him until the end of the season and then we'll see what happens."
Muñoz has scored six goals and registered five assists this season, earned his Spain debut and scored on it, and has reportedly attracted interest from Barcelona, who view him as a long-term attacking option.
However, Real Madrid's structural advantage in any deal — owning half his rights and the right to match any offer — makes a move to their rivals deeply complicated.
Reports from the Madrid side suggest the club has already decided to activate the clause and bring him back to the first team.
Osasuna would like to retain Muñoz for another season, but Vázquez acknowledged that decision ultimately rests elsewhere.