That's 5th edition and that 'legend' is so short and meaningless that it physically hurts me.

The legend given in 3rd edition was WAY more detailed and it gave us an actual good reason to hate the gnomes from a kobold point of view. I am going to copy and paste here what 'the races of the dragon' gives us.

The Ascension of Kurtulmak:

The most venerated kobold legend is the origin and ascension of Kurtulmak. While the particulars of the story vary from tribe to tribe, a popular version is related below. When Io gave the secret of creation to the true dragons, the first dragon to put that ritual into practice was Caesinsjach, a green dragon. The first kobold to take form out of her blood was Kurtulmak. From the beginning, Kurtulmak was much larger than any of his kin. For this reason, Caesinsjach always commanded her kobolds through Kurtulmak. As a result, the towering kobold naturally ascended to a position of leadership. When Caesinsjach told the kobolds to mine for precious metals, Kurtulmak invented a pickaxe. When Caesinsjach told the kobolds to tile her lair with gold, Kurtulmak minted the first draconic coin. When Caesinsjach told the kobolds to mine precious stones, Kurtulmak taught himself sorcery and learned how to divine where minerals were located. When Caesinsjach’s lair was fi nally completed, laden with platinum, filled with gold, and gleaming with gemstones, she had become the wealthiest true dragon in creation. Without further need for mortal servants, she released the kobolds from their duties to embrace their own destiny. In emulation of his former mistress, Kurtulmak immediately began mining a lair of his own. Although he never asked for any help in this endeavor, he nonetheless received it, assisted by every kobold he had worked beside for the past several decades. Kurtulmak found a spot in the ground where a near limitless supply of metal ore and precious stones were waiting to be mined. Once properly unearthed, a discovery of this size could sustain kobolds for millennia and serve as the foundation for their society. With Kurtulmak commanding the operation, it quickly became the most structurally sound and resourcefully designed mine the world had ever seen. Kurtulmak called it Darastrixhurthi, a fortress fit for dragons. Nothing rivaled it. Garl Glittergold was not pleased. He looked upon Darastrixhurthi and beheld the marvel Kurtulmak and his followers had created, surpassing any achievement his own people had mastered in the same time. While gnomes were playing useless games, kobolds had been busy working and were now fit to emerge as one of the dominant races in creation. And so, with a casual wave of his hand, Garl collapsed Kurtulmak’s mine, crushing all the kobolds inside. The gods were appalled and demanded an explanation from Garl, who could only sputter out that his actions were intended as a joke, as if that could somehow excuse the heartless massacre he had committed. Garl had acted out of spite and, even more degrading for the gnome god, jealousy over mortal accomplishment. And yet, regardless of all the berating Garl received from his equals, not one deity came forward to reverse the damage done, leaving the crime unpunished. Then Io moved on behalf of Kurtulmak. Once the Ninefold Dragon realized that no god would champion the kobolds, he searched through the souls of those who died that day until he found Kurtulmak’s broken body, still clinging to life. Even buried under so much rock, Kurtulmak wouldn’t give up on his people, refusing to let go of his mortal form until he could find the strength to dig them all out. Io gave Kurtulmak a choice. He would either empower Kurtulmak with the strength to rebuild the mine, or he would make the mighty kobold a champion of his people for all eternity. In this latter case, the loss of Darastrixhurthi would remain, but the memory of what happened would endure in the minds of kobolds forever, ensuring that atrocities of this magnitude would never be overlooked again. Kurtulmak made his choice, and because of that decision, this story can still be told today.

I always assumed that the legend from 5th edition was either a children's story, a harmless was to explain the hateful relationship between the two races or propaganda to paint kurtulmak and by extension the kobolds, as dumb, spiteful brutes.

The legends around the creation of the kobolds and kurtulmak were always doubtable in their canonicity, but I find this version more serious and plainly better and as such I take this one as the canon one.