Through this wiki's policies, the main decision for a very long time has been to say that they're irreconcilable, conflicting accounts but also to discard neither, or consider one of the three "apocrypha".
It's hardly the only instance where the franchise's contradicted itself. As noted on Tardis:Valid sources: "The DWU has messy continuity. A story can't be declared invalid just because it contradicts other stories."
Lungbarrow (and any other books which mention the Looms, not hugely familiar with which specifically make this part of Doctor Who) is an officially-licensed Doctor Who work that's neither a parody or pastiche that's intended to come somewhere after Survival, just like the recollection of the Untempered Schism in The Sound of Drums and the cot scene from A Good Man Goes to War are. Unless authorial intent has stated it's in some sort of alternate continuity, what-if, or parallel universe, we count it on pages which have an in-universe perspective. We also don't have "levels" of canon. Tardis:Neutral point of view basically says we give equal weight to both the NAs and Drums and Good Man from the television series. We don't say television continuity "trumps" 1990s novel continuity.