Never found Alaba particularly impressive in midfield and i think there is a reason he only ever constantly played there for the NT. Pep had him and Lahm play in some kind of fullback/CM hybrid role what was interesting but i don't think that's really comparable.
The last couple of seasons on LB also weren't that amazing imo, maybe partly because Ribery wasn't by his side anymore all the time but i felt like his level dropped. Also got his fair share of criticism by Bayern fans for that. Still very good though, just not best of best like in his best form.
CB he was really good even though i think he isn't that outstanding when it comes to defensive skills, his selling point is more his passing i'd say so maybe not the right guy to stabilize a shaky defense. He'd also compete with Lenglet what wouldn't be ideal for the squad.
Overall he's still great due to his versatility. Somewhat of an even more versatile and generally better version of Sergi Roberto. If we talk a starting spot it should probably be still LB. I mean our midfield could use fresh blood as well but idk if Alaba would be ideal there as a fixed starter next. Even though they would all be a bit too similar i'd still take Thiago over Alaba there any day of the week if we're talking Bayern players.
Still great and versatile player but it also depends what his conditions to sign are. At some point the club has to stop handing out fat contracts and safe starting spots so if that's what he's after then maybe it's better to not bother with it. If not then he'd be a no-brainer due to his contract situation.