So Saudi Arabia claims that Iran fabricated the story to embarrass the Grand-Mufti. It does have an “onion-like” quality to it.
But it just points to the larger issue. Who has “authority” in Islam? Well, there are respected Imams, Muftis or Mullahs. But their authority is really national or cultural. Maybe they are government appointed. Maybe they lead a particular sect or tribe, or maybe they just claim to represent themselves. As long as they claim to represent the Koran (and if they have enough money or guns) they will be listened to.
It simply shows - you can not “reform” Islam, because there is path to reforming it.
If the civilized world is to survive, we must recognize Islam for what it really is: It’s not a religion, form of government, or anything recognizable to the civilized mind. Islam is a disease, an incurable disease of the mind that is highly contagious among the feeble minded and is now spreading among the world’s feeble minded at an epidemic rate. As with any disease, one can’t reason with this disease, negotiate with it, or treat in any manner other than how one would treat any other incurable disease.
Past efforts to contain this disease have failed. Now, carriers of this Plague of Islam must be eradicated wherever they're found, for if they're not, this disease will eventually end not just Western Civilization, but it will undo over 5,000 years of human civilization.