Mabuni Sensei was indeed a supporter of sparring activities. That said, I don't see how that is in conflict at all with his opinion that karate should be taught as a complete art with grappling and locks included.
I would be interested in seeing a later quotation from him where he changes his mind about that.
It is not so much seeing a quotation, but rather seeing the effects of his actions, especially after WWII when all martial arts were banned. Only "sports" were allowed back, kendo, judo, and karatedo.
In his Taekwondo Times interview, GM LEE Won Kuk mentioned pressure points being attacked. I later asked him about that and he said in Japan, only Otshuka Sensei focused part of his curriculum on that, because of his prior jujitsu background. I later touched on Mabuni Sensei and he considered him a martial arts genius. GM Lee said that Mabuni Sensei was better than FUNAKOSHI Gichin Sensei, who I believe learned the Pinan kata from Mabuni Sensei. According to GM Lee, Gichin Sensei later sent some of his students to learn additional kata from Mabuni Sensei, increasing the number of kata from 15 to its present number, twenty something. GM Lee said that the Shito Ryu curriculum was loaded with kata, sparring, and weapons, lots of kata, and something had to give, so it was the pressure point and jujitsu stuff. He said that students who came to learn karate wanted to learn to kick and punch, not press points or throw, that if they wanted that they would go to a judo or jujitsu school, not a karate school.
And given that Mabuni Sensei was a professional martial art instructor, he had to give his students what they wanted, which was kicking and punching. That is why Mabuni Sensei was so interested in sparring, because his students were interested in that, just like the students at the Shotokan. If Gichin Sensei had his way, everyone would be punching the makiwara and doing only kata, but even he was flexible enough to see that wasn't the way.
You especially see it in what his students do, who have tended to be heavily into competition and not so much, if at all, into joint locks, throws or what have you. Even Mabuni Sensei's korean student, Dr. YON Kwai Byeong, was a big promoter of tournaments and competition, so much so that he was the one who set up those early exchange matches with Japan, and in doing so, brought back the first hogu from Japan, similar to the ones Mabuni Sensei is wearing in that photo.
Picking out a comment from 15 years prior to his death is to me, misleading in what he had evolved to towards the end of his life. If you wish to see the man's teachings, take a look at his students, not his words. The biggest karate school here is a Shito Ryu school, and it is 100% competition, and has been since I could remember. They have world champions coming out of that club, and if Karate makes it to the Olympics, I have no doubt that there will be US Team members from that school in 2020 and beyond.