Fifteen minutes into Bayern Munich's toughest Bundesliga match of the season thus far, a good number of fears about Pep Guardiola's new regime were being realised. The visitors looked blunt in attack, muddled in midfield and vulnerable at the back. Schalke, aware that the high but narrow position of Bayern's full-backs Rafinha and David Alaba left them space to attack down the flanks, were having the better of the champions in the Veltins-Arena. In the centre, Philipp Lahm was more Javi (García) than Xavi – sloppy on the ball, dispossessed by Kevin-Prince Boateng, who forced a save from Manuel Neuer.

Schalke's manager, Jens Keller, was sensing that this could be his day. The Royal Blues had lost their last five league games against the Bavarians, yet here they were, on their way to a tactically well-engineered win that would put them on the map as title contenders and deliver Keller, the Pep-Slayer™, a truckload of credibility.

But then it was all over. A corner from Arjen Robben found the unmarked Bastian Schweinsteiger in the box – his marker, Boateng, had been blocked off the ball – and Atsuto Uchida, defending on the line for Schalke, could not keep out the header. A minute later, Alaba crossed to Mario Mandzukic, who made it 2-0 with another downward header. That double hit did not just decide the result, it delineated precisely where Schalke's match ended and Bayern's started. Those promising early moments and the unwavering support from the crowd provided the only solace for the home team after a 4-0 defeat that Keller called a "drubbing", Schalke's heaviest at home in 32 years.

For Guardiola on the other hand, it was much more than the biggest win of his reign. "It was our best game," said the Catalan. "I don't know if it was a small or a little step but it was a step forward." It felt more like a giant leap. Schalke just zombied through the second half, transfixed by Bayern's stupendous confidence in possession. Guardiola denied it later ("There is no perfect game") but his side were very much flirting with perfection in minutes 20 to 90.

They were scarily dominant, in complete control of space, time, the ball and their opponents. Like Spain and Barcelona at their very best, Bayern did not even afford Schalke the opportunity to foul them – they were always three steps ahead and appeared to be playing with four extra men in midfield. A four-goal margin (with Franck Ribéry and Claudio Pizarro also scoring) did not begin to do justice to a gulf in class so wide it threatened to devour the entire city of Gelsenkirchen.

"You are 2-0 down and don't stop running after the ball like an idiot, that's demotivating," sighed the Schalke left-back Dennis Aogo. "We didn't lose against any team today but against the best team in the world," said Boateng. That verdict was self-serving, of course, but it did not feel too far off the mark.

Bayern's supreme performance brought to mind 11 Freunde's "Breaking Pep" August issue cover that had cast the Bayern coach as football's Walter White: after much tinkering in the (training) lab, a winning formula is beginning to produce rather intoxicating stuff. The two main ingredients – order and flexibility – are mundane enough but it is all in the mixture ratio. In possession, Bayern line up in four lines, with two centre-backs, the full-backs pushed up alongside the deep-lying midfielder, four attacking midfielders and a striker. The three central midfielders constantly switch positions and the wide players are encouraged to move inside to create a funnel of pressure in the middle. Bayern pass the ball more than ever before but as Süddeutsche Zeitung noted, the passes are being made in more congested space. Losing the ball high up the pitch is almost a part of the system, wrote the paper, since it allows Bayern to press high up and win the ball back in the most dangerous positions.

Saturday showed that the players have begun to buy into this change, after some initial resistance. Bigger tests against better opposition will be needed before one can be sure that it works against the best sides in Europe (and Borussia Dortmund) but you can sense that the team is finding its feet under Guardiola's new system. Crucially, the manager has also adapted his tactics to the realities on the ground. "I have learned that the most important thing is to control the counter-attacks because every loss of possession is a counter-attack in the Bundesliga," he explained. Such is the importance of the counter that he has taken to calling Germany "Konterland".

Depending on the exact position of the ball, his Bayern team alternate between counter-pressing and closing down spaces in midfield. Both take plenty of practice as well as intelligence from the players. The game against Schalke felt so remarkable because it suggested, for the first time, that Guardiola and his team could evolve into something very special – not diminish each other, as the fear had been a few weeks earlier.

The extent of the progress – and its pace – has been frightening.

Talking points

• Werder's striker Nils Petersen was the king of the North (derby) with the two goals at Hamburger SV that plunged the home side deeper into crisis on Saturday. "From now on we're only fighting against relegation and for our existence," said the captain Heiko Westermann. Bert van Marwijk is expected to sign up as the new manager on Tuesday – an eminently sensible appointment in these precarious circumstances, even if the Dutchman is perhaps not the man to take them dramatically forward in the next couple of years. If you're looking for this column's usual, lazy, sarcastic digs at a proud club's expense, incidentally, look elsewhere: they are sadly beyond a joke right now.

• It wasn't a good weekend for those in Yellow. Angela Merkel's coalition partner, the FDP, were booted out of the Bundestag on Sunday. But that's another story. Dortmund at least escaped with a 1-1 draw after struggling at Nürnberg the day before. A rare Marcel Schmelzer free-kick saw them take the lead, but Per Nilsson equalised. Both sides had plenty of chances to win the match but Jürgen Klopp, who fielded the youngster Marvin Ducksch in attack and Erik Durm in defence, took a sanguine view. "We can live with the point, we've lost games here in the past," he said.

• "Help! We don't understand the rules any more," screamed a BILD piece under the headline "Hand-Chaos". The paper is not alone, it seems; a number of players and coaches have admitted to being unclear about the laws of the game in relation to handling the ball, too. "I don't know any more," said Leverkusen's coach Sami Hyypia. A flood of penalties – there have been eight this season, compared with two at this stage in 2012-13 – have followed in the wake of the confusion. The situation has become so bad that Robin Dutt feels a rule change is in order. "There should be an automatic penalty if someone touches the ball with their arm in the box [or has the ball kicked against it]," said the Werder coach.

Klaus Hoeltzenbein of the Süddeutschen Zeitung conversely argued for more discretion: why not give the referee the option to award an indirect free-kick when there's no intent?

Results: Borussia Mönchengladbach 4-1 Eintracht Braunschweig, Hamburg 0-2 Werder Bremen, Schalke 0-4 Bayern Munich, Nürnberg 1-1 Dortmund, Mainz 1-4 Bayer Leverkusen, Wolfsburg 2-1 Hoffenheim, Hanover 2-1 Augsburg, Freiburg 1-1 Hertha Berlin, Stuttgart 1-1 Eintracht Frankfurt.

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