On Thursday, Tau completed a permanent transfer away from Premier League side Brighton after penning a long-term deal with the Pitso Mosimane led Al Ahly in Egypt.
The 27-year-old made just six appearances during his spell with the Seagulls and often found himself behind the likes of Neal Maupay and Leandro Trossard in manager Graham Potter's plans.
Despite this, national team record goalscorer McCarthy believes the former Mamelodi Sundowns star is talented enough to have broken through at the club and should have fought harder to stake a claim for a spot in the starting lineup.
"My personal opinion and feeling on this is that it was a move backwards for him," McCarthy told SAFJA on Friday. "I had seen Percy Tau when I started coaching, when he was still at Sundowns, and I met the boy and I watched him a few games and I think he's a hell of a player," he added.
"He has an incredible mentality, his work ethic is tremendous, he works exceptionally hard, and he's eager to succeed and when you have that kind of mentality, there's no obstacle that can really stand in your way.
"So, the fact that he's taken a step back instead of fighting it out at Brighton against the likes of Neal Maupay, [Leandro] Trossard, Danny Welbeck...
"When you look at the calibre of players he's up against, yes, maybe these are players who are higher on the list in the coaches mind and you see it when the selections come, Maupay is always in the starting lineup.
"But I would rather compete for a place in the side fighting Maupay than competing against the likes of Sergio Aguero, Robert Lewandowski, your Messis and Ronaldos, your [Federico] Chiesas and [Romelu] Lukakus.
"When you've got those kinds of players in front of you and you don't play, then I think it becomes understandable for you to take a step down and seek different challenges, different opportunities where you can play because these are world-class players.
"But if you've got Maupay – and I'm not saying he's a bad player – but Tau is equally as good as him. They're kind of the same height, they're not too far apart in terms of height. Maupay has good aggression to his game and the coach seems to be really fond of him and that's why he's always in the starting lineup but I think Tau is a far better player.
"He's got great vision, he's got fantastic skills, good dribbling abilities and in front of goal, he's pretty deadly. So I think, if he had just persevered and stuck to his guns, his opportunity would have come and he was playing in the best league in the world.
"Everywhere across the world, people watch the Premier League. Whether you're a starter or not, when you're in the Premier League you don't want to miss that opportunity and go somewhere else because there isn't a better league...
"So the fact that Tau has gone, I can only assume it was because he wanted to play and was growing frustrated at not playing at Brighton and not being in the side at times.
"I can understand from that point of view, but I think when you are among the best in the world, you want to stay there because that's where you gain the most experience and when your opportunity comes you're going to grab it with both hands."