When I was reading up on the watermelon story, there were a lot of variations. Sometimes Rikyu ate parts of it, sometimes he didn't, sometimes he was angry, sometimes he calmly reprimanded the host. I'd attribute that to the story being a tale passed down through spoken word, and thus, capable of molding to fit whatever the storyteller wants.
Another factor to consider is that this sugar watermelon story appears to be an embellishment and may not have actually happened, so there might not even be a set truth to follow or be wrong about.
The salt on watermelon story is a separate anecdote, but one that didn't really contribute to the message Kariya wanted to convey. Either way, you're correct. Rikyu's issue is not with garnish as a concept, but with unnecessary garnish, or garnish that masks the identity of the ingredients. Looks like I'll need to work on the wording a bit more if that was too ambiguous.