The reason the Alto included a GUI at all was specifically Alan Kay's vision, as explained in the text I quoted by the people who built it. That text includes primary sources written at the time by, among other people, Cedar's main author and Bravo's main author — not only, as you imply, stories written down from memory twenty years later. It also includes primary sources from many years later, but those add to the evidence; they do not subtract from it.
I do not believe that Wirth's "OO" is a different topic. To the best of my understanding, the reason he added procedure-typed record fields in Modula-2 and retained them in Oberon was specifically in order to implement that tiling window manager, which in later versions of Mesa (and Cedar) replaced the overlapping-window GUI in earlier versions of Mesa, which came from Alan Kay's 01969 doctoral dissertation, by way of Smalltalk.
Were you two having a discussion about extensible programming languages, or an extensible discussion about programming languages? Or was it an extensible discussion about extensible programming languages after all? Maybe it all boils down to whether discussions about programming languages should use static or late binding?