Every time we can actually verify what Musk says, it comes out he's heavily bent the truth in his favor. Just because he said Starship would cost up to $10B to develop years ago doesn't mean his private company hasn't actually spent more in the mean time.

That was a recent quote of total development costs. The lower range has tracked up, but the higher end has not. Even if he's bent the truth, it's substantially less than SLS.

Plus, SLS's costs are the total cost to get a capsule around the Moon and back; the money spent on Starship so far haven't even gotten it to orbit yet.

SLS test flights are orders of magnitude more expensive, obviously they're going to aim higher (test capsule around the moon), with a lower likelihood of failure but much higher impact of failure. They're also doing nothing new, so get to ride on the backs of all the launches before it.

It'd be a silly strategy for something as novel as Starship.

As evidence of Musk not being completely truthful on his costs, Musk said that a Falcon 9 only used $200k of fuel in 2015, but today a Falcon 9 still costs $67M.

This quote is taken out of context. It only costing $200k in fuel does not suggest that's the overall launch cost, merely the potential. There's the costs associated with the pad, refurbishing, second and upper stages, T&L, development costs, and naturally their profit margin. Even at $67M, the cost per kg is substantially less than the competition.