Did anyone actually believe that was anything more than a joke? It was a disgusting and weird thing to suggest about a disgusting and weird guy, and highly immature, but it's only libel if it's presented as being true.
In only slightly more isolated regions of the internet than here, it used to be, when this story was new, that whenever this story was brought up, with dozens or more credulous comments with varying attempts at humor, there was at least one person who commented that it was fake, often with citations. As time went on, for each new instance, the number of comments dwindled, and the lone debunking comment appeared more and more rarely. Now I never see it, even though the story still occasionally appears, with a handful of credulous comments. So I would assume that yes, many people believe it.