Do not fully trust in tf2's replay editor. If this was recorded in demo, it could've been much more clearer. The spy was fully invisible and I knew right where he was going. I took my patience to shoot and made the kill while he approached the entrance. Even if he took several grenade damages or not, it is still an instant kill for the spy for his max 125 health, (Headshot's -150).
What you're seeing in the replay is his attempt to change to another disguise. But yeah, this is as far as I can go for proof. This is also the second time headshot killed a fully cloaked spy. The first was at foundry, and I randomly felt scared for my life.