It is libelous to say that someone said something that they did not say (assuming, as in all cases, that what you say could hurt their reputation in the community). There a spectrum of behavior: one the one hand, there are straight up misquotes—where you attribute a direct quote improperly. On the other hand, there are synthetic statements, where you 'sum up' what someone has said in a distilled way.

In this case, TC would argue that they are distilling his memo by using the phrase "biologically less capable of engineering". Personally (and as a former lawyer, but not a libel lawyer), I think this position is not especially strong, since he focused mostly, if not exclusively, on inclination-type evidence. If you're going to give a one-sentence summary of the memo, you probably shouldn't refer to ability instead of inclination.

And given that the person they're talking about just sued Google, I'd say it's unwise to use a characterization like this—even if it is ultimately legally justifiable. Why not say "biologically less suited for engineering", which would encompass the possibility of both ability and desire?