This situation was quickly getting out of hand.
First, Julius managed to steer the entire thing into a situation that greatly favored him. And in doing so, he left Theo with no other choice but to retaliate.
But how could Theo do so, when it was Julius' words against his?
As a quasi-star teacher, Julius' words held nigh infinitely higher weight than anything Theo, the trash, would say. And since Theo was the trash of the trash, then the only way in which he could reduce a proud and powerful student into a reported sobbing mess was through some unscrupulous means!
That's why, the easiest way to change the situation around was to… deny what everyone considered the truth about him.
In doing so, Theo rendered the point of him being unable to toss the girl in question invalid. And that was merely one of the several benefits to the story Theo came up with.
