The German was appointed as caretaker during the end of the 2021/2022 season, when Ole Gunnar Solskjaer was sacked.
While Phelan did remain in the backroom staff, he admits the move was never the right fit.
"It never felt right. There is nothing interim about being Man United manager — you are the man. It was another change in that world of madness at times," he explained to The Athletic.
He added: "It's difficult to understand when the game is going on, and you're there, but the input is coming from somebody on the end of a phone in another part of the world.
"It was weird. I just thought, 'Why? The game is there, watch it.' I don't need somebody in wherever to tell me his thoughts when he isn't even relevant to the club right now.
"It worked for Ralf. I respect that. It just wasn't in my understanding of the game. But maybe it's how the game is going.
"I'm still getting my head around 30 staff with laptops every game – analysing what?
"You've got 10 minutes to go in a match, you're losing, then you're having a discussion for five minutes and the moment's gone. I used to think, 'Guys, the game's nearly finished'."