Cruz understands and even speaks Spanish. In this he is like a lot of Tejanos—a LOT—that English is his first language, that he is not tempted to say one thing to an Anglo audience and another to a Spanish one.
Rubio never denied what Cruz claimed Rubio said in Spanish. Rubio only questioned how Cruz could understand it.
Just so you know, FWIW, Cruuz speaks Spanish the way Borat speaks English.