I would say that the Inoki exhibition caused more potential damage to Muhammad's legs - he had bloodclots in consequence - while the 'Thrilla' took more out of him overall. The Inoki affair was Muhammad's biggest mistake in the ring that did n't have the names Holmes or Berbick written on it,IMO.
The rules/conditions on the match Ali's team placed actually failed him. If they had agreed to let Inoki use his grappling but not kicks (certainly not in his big boots), while it may have still made Ali look silly it'd have been better for his health. Kicks to unconditioned legs are extremely painful and damaging.
I've read that the damage Ali suffered in his legs from that senseless exhibition against Inoki was serious enough that it could have resulted in amputation!! Talk about a potential catastrophe--(and for WHAT!!) Hard to think of a more foolish exercise by ANY fighter-let alone one of Ali's stature!!