A dubious distinction is one that is doubtful or possibly untrue. Given the lack of hard data, the aporcryphal nature of the stories, and the fog of war etc, dubious seems like a perfectly cromulent word to use here.
A "dubious distinction" is a distinction which is undesirable.
West Virginia has the dubious distinction of being the US state with the lowest average educational achievement.
If you parse the words separately, the other meaning is literally correct, but will not match the speaker's intent.