I can’t verify or debunk your story (though it seems like just that, a story) but I would like to point out that Byzantine emperors (and their Roman predecessors) were addressed by the title βασιλεύς (‘basileus'). In both Modern and Ancient Greek this meant as much as sovereign and was used for both kings and emperors.

So unless the diplomat was speaking something else than Greek it is unlikely such a conversation could have taken place as the diplomat could not have made this mistake.

 

Edit: did some search through this sub for you and this topic has come up before, not many answers though.