Why would the Scruggs camp go along with the story of Illinois saying "no thanks" if it wasn't true? What incentive would they have to do that?
That alone is why I believe the narrative that says Illinois broke up with Scruggs, rather than vice versa.
Recruiting is a business about relationships and there are many reasons why recruits and coaches say things to preserve image and goodwill, not only for themselves but also the other party. No different than when schools allow recruits to say they have "offers" when in many cases they are not committable, or schools telling recruits to say they are not considering their school anymore, when in reality they let recruits know they have gone another direction, or coaches dropping their name from consideration for job openings right before announcement. It happens all the time for both recruits and schools.
Coaches (and recruits) are not naive. They most often know their chances. And it is not lack of integrity either. Just because a recruit schedules a visit, does not mean every schools getting a visit has the same chances. Scruggs and Wilkes are examples of that. It does not mean that their visit (or planned visit) was not genuine. But that does not imply equal chances either.
Other than the coaches and recruits (and/or family) nobody really knows the exact communication during the course of their recruitment. But it was no secret that Scruggs (and Wilkes) were longshots. Groce is not naive. The most likely scenario is not that Illinois preferred someone else over Scruggs and said "no thanks.". But they did not want to take the chance of waiting for someone who was considered a long shot instead of getting a very good player (but lower ranked) with a guaranteed commitment.
I am sure Scruggs lost no sleep and shed no tears, and his family handled it perfectly. But it does not mean that is was a "preference" decision with everything else being equal, despite the respectful statement by the family. JMO.