Nah, he isn't. And what he says is canon, whether we like it or not. And it's no more immersion breaking than it's growth speed in my opinion, it was always part of the original 1979 film so it's certainly not something that breaks my immersion.
I've really grappled with David being the progenitor or the titular Alien since Covenant dropped. And I think we need to really look at the fact that what he says
isn't always true. One has to take with a grain of salt almost anything David says. He lied about Shaw. He lied about the deployment of the Pathogen. He told Oram the eggs were perfectly safe. He was wrong about who wrote Ozymandias. He has massive delusions of grandeur.
All that laid bare, anything he says has to be widely distrusted. When he talks about genetic manipulation, or about creating the perfect organism, he could very well be lying. He could be living in a fantasy. For all we know, the Pathogen/Black Goo/Accelerant is simply following it's own evolution. And that, perhaps, the Engineers weren't the ones who manufactured it. Maybe they found it, as well, and were experimenting with it.
Regardless, there's still a lot of wiggle room in the canonical facts based on the reality that David is severely flawed. And a massive stranger to the truth.
I love what Fria Ligan have done to tie everything together. The marriage of the different source materials works for me.