That is not exactly true. It sounds like there was a genuine misunderstanding during their call, and that Huffman might have believed - for a portion of the call - that a blackmail attempt was happening. If you listen to the audio, it really does sound like a blackmail attempt. At least that's how I heard it.
It also seemed clear that Huffman no longer believed that he had been blackmailed by the end of the call. But it wasn't "entirely invented," and I actually think that Huffman might not have fully believed Selig's explanation of his 'pay me $10 million to make this go away' statement (or whatever Selig's exact language was).
Separately, from what I recall, Huffman did not accuse Selig of illegally recording their phone call. Huffman took umbrage over the release of what, IIRC, he referred to as a private conversation, stating that he did not see how he could possibly do business with Selig after that. In fairness, Huffman's statement makes sense in isolation - regardless of whether the call was legally recorded. Which it seems to have been.
I think that Huffman looks really bad in all this. But that's a reason to be particularly careful about accuracy in our statements about what happened.