Vallabha Bhatta's declaration certainly agitated Sri Caitanya Mahaprabhu. Consequently, Sri Caitanya Mahaprabhu remarked sarcastically that He considered that anyone who did not accept the svami (or Sridhara Svami) as an authority was a prostitute. Prabhu hasi kahe; but he smiled and said this jokingly, because they were friends.
Although this point is very controversial, it is not based on hearsay, as you have stated, but it is authoritatively documented by the Caitanya Caritamrta. As you have written in a friendly spirit, I do not wish to discuss this point further. If you will kindly take a little trouble to read this chapter "Lord Caitanya meets Vallabha Bhatta" you will understand the whole situation. Actually Vallabha Bhatta should not have criticized Sridhara Svami, because even now Sridhara Svami is very respected. Even authorities like Sri Jiva Goswami and Visvanatha Cakravarti Thakura mention in their commentaries, svami caranat, as we have learned it from the lotus feet of Sridhara Svami. So when Vallabha Bhatta criticized Sridhara Svami, Caitanya Mahaprabhu criticized Vallabha Bhatta strongly. This is a fact, but this does not mean that Vallabha Bhatta and Caitanya Mahaprabhu were inimical. Vallabha Bhatta honored Sri Caitanya Mahaprabhu as a superior. Sometimes Sri Caitanya Mahaprabhu would chastise Vallabha Bhatta and sometimes He would favor him, because this was their relationship. Sri Caitanya Mahaprabhu would never refuse the occasional invitations of Vallabha Bhatta.
Everything will become clear if you kindly read this chapter with attention. For example, we see that two lawyers in the courtroom may fight vigorously about a law point, but upon returning to the law library, they talk and embrace like friends. So you should always remember that we have no ill feelings towards Vallabha Bhattacarya. We have full respect for him, so there is no harm if these facts are discussed in the society of devotees. Devotees always humbly offer respect to everyone, but when there is a discussion on a point of sastra, they do not observe the usual etiquette, satyam bruyat priyam bruyat. They speak only the satyam, although it may not necessarily be priyam.