If you believe this isn’t true you’re wandering into a territory of objectively demarcated language and dialect classification to little benefit. Pedagogically useful I’m sure, but to what semantic end? Hell I thought this was the type of problem linguistics intended to solve.
(Though, as to your point about England and Saxony: (1) mutual intelligibility is not the same as being the same language (2) Old Saxon isn't the same as Old High German.)
[But, you're right about demarcating language: it gets tricky pretty quickly. E.g., from a certain perspective, English (and German, and French, and Hindi) don't exist in the first place. A bunch of people have some sort of instantiations of formal grammars + lexicons in their brains and the output of these is such that some sort of more or less effective communication takes place and so we say these people 'speak the same language'.]
So yeah there would have been mutual intellegibility, because at that point there was likely high mutual intelligibility between all Western Germanic languages. But like you said that doesn't make them the same language. And like you aluded to, it's kind of a lumpers vs splitters thing.