The Bundesliga champions were always in a race against the clock to sign the duo, with the German transfer window closing at 5pm UK time.
According to transfer expert Fabrizio Romano, Palhinha completed two rounds of medical tests with Bayern and also took a picture with the shirt of his potential new club, in addition to undergoing media duties.
However, Romano claims that a deal is now '100% off' in a late twist.
Sky Sports News back up those reports, with the Portugal international now allegedly set to remain at Craven Cottage beyond Friday night's 11pm Premier League deadline.
The report claims that Fulham battled hard to keep a player they 'value highly', and a deal proved to be difficult when Marco Silva's side were unable to bring in a replacement.
The London club are believed to have made contact with Manchester United to discuss Scott McTominay but were told that the Scotland international was not for sale.
Despite the breakdown of the Palhinha switch, Ryan Gravenberch's move to Liverpool is still expected to go ahead, with a deal for the Bayern midfielder potentially being confirmed in the next hour or so.
Bayern had also been in discussions over a move for Chalobah, with the England international given permission to leave Chelsea before the end of the transfer window.
However, Thomas Tuchel's side also ran out of time when it came to a potential deal for the centre-back.
Nottingham Forest are believed to be keeping a close eye on Chalobah's situation, but it is understood that a move to the Reds is unlikely at this stage of proceedings.
Chalobah is therefore set to remain at
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