So in other words, according to you, all the people speaking in the book are not telling the truth?

I haven’t read the book, and it seems to me I probably won’t read it anytime soon either. Though it’s certainly a worthy competitor to the boredom of the cantor’s repetition of the Amidah. So it’s hard for me to determine. My impression is that in most of these cases we’re not dealing with lies, but with naive interpretations of events and cognitive errors based on an excited prior assumption about the rabbi’s extraordinary abilities.
For example, the legends about “Mama Rachel” among the soldiers from Gaza, where of course it is well known and widely publicized that the testimony is firsthand and the soldiers involved swear that this is exactly what happened to them. In my opinion, stories like these are based on seeing some Arab woman whom they imagined said some word in Hebrew (and maybe she really did say a word in Hebrew), and from there everything snowballs.
Sometimes the need to magnify the rabbi’s name and status justifies, in the eyes of his followers, not examining the events and interpretations too closely. But usually I’d say this isn’t outright lying so much as stupidity.

In the follow-up book (about the Baba Sali, if I remember correctly), much more extreme stories are brought (about arak being created out of thin air before the eyes of hundreds of people), with lots of witnesses — Rabbi Mordechai Eliyahu being one of them, and from the way people talk there it sounds like this wasn’t “normal” for him — so that even naive people wouldn’t imagine or distortively interpret them that way. So the only way out is to say these are like the “magic tricks” performed by magicians today.