Hadn't heard that story nyfan, sounds likely having listened to the conversation a few times.
I think poor Georgie was having 'issues' with Paul, even back then, that's my reading of it. George (H not M!) seems to be inferring that Hey Jude could be interpreted (musically) in several ways, and I agree - after all, it's a 'classic', and could indeed be interpreted in a jazz style, a classical style, etc (and history agrees with George, think of all the different cover versions of any classic Beatles song, they've been interpreted in so many ways, and they ususally stand up to the different treatments). Paul just had his idea of what is should sound like in his head, and it was different to George's, but you can see the layers of resentment must have been building for years. George H seems to want George M to agree with him, maybe it was good to have an ally.
I'm loving how seriously John is taking the session, by the way! There doesn't seem to be any druggie-ness going on, it's all very 'let's get the job done'. Thanks for posting the video, JimmyMcCullochFan.