What Henkin argues (based on יגדיל תורה as well) is that there is no reason to believe he fabricated the story. In fact he points out we have two independent sources that the meeting indeed occurred (Rav Maimon). What he does say is that the details are not reliable since that was the literary style of the day to exaggerate depending on ones perspective. The fact the that the meeting occurred though is pretty clear, if we were to use the 'Mondshine methodology' to discredit anyone that ever reported anything inaccurately there wouldn't be any chassidish stories that happened either (or maybe any stories at all). Clearly Mondshine has an agenda this is especially evident in the sharpness of the way he expresses himself against the Torah Temimah.