Phonics and arguing with eight year olds

My students have been studying trickster tales and were assigned to write their own. One little boy, we shall call him Confident Boy (CB) from here on out. He is a super sweet kid, loves school, loves learning, has some serious ADD (not hyperactive) and reads far below grade level. For all that he struggles with, you would think he would give up or not care. Exact opposite-this kid loves to learn and wants to get it right. He is in an intervention group and we have been debating if we should change him to a different (harder) group because he is doing so well. He brought me his trickster tale and this is the conversation that followed:

CB: Here's mine! Can you check it for me?

Me: Sure! The Rabbit Feth. Is that the rabbit's name?

CB: Oh, that was supposed to say feeth. I didn't know how to spell it.

Me: Feeth? What's a feeth?

CB: You know, a feeth, someone who takes your stuff.

Me: You mean a thief?

CB: No. A feeth.

Me: A theif. Thhhh ieeeef.

CB: No. Feeth. Ffffffff eeeeeeeth.

Me: CB, the word starts with th, not f. It's a thief who steals things, not a feeth.

CB: (looking skeptical) Are you sure?

Me: 100%

CB: Can I check in the dictionary anyway? Just to make super-sure? I still think the word is feeth, like teeth.

Me: Go for it. T-h-i-e-f.

I then wrote down his title "The Rabbit Feth" and a brief explanation to the other teacher about the intended title. Needless to say, CB stays in his phonics group...and was actually surprised that thief was in the dictionary...and feth wasn't.