First off, Lovecraft liked the story. But he had objections to specific points, both grammatical and historical. Some are fair enough, such as his skepticism whether Hittites and Philistines were still present (at least by those names) in the post-Alexander Hellenic world in which Leiber's story is set. Some, particularly the points of grammar, are nit-picky in the extreme, such as disapproval of words like "react" ("a somewhat needless modernism") or "unbeknownst" ("there is no such word") or "contact" ("ought never to be used as a verb") or "intrigue" (whose use as a verb "really ought to be discouraged"), much less split infinitives ("in spite of all the modern libertarian ballyhoo in their favor"). Lovecraft mentions (p. 171) having just finished editing and ghost writing 'a manual on "Well-Bred English" for a private school in Washington, DC', and the hypercorrectness shows.
More worrisome. though, are Lovecraft's recommendations. Leiber apparently mentioned having in mind next writing a story about Fafhrd and the Mouser set in early Imperial Rome (the time of Julius and Augustus Caesar). Lovecraft then goes off on books Leiber must read, or have immediately accessible for reference, before he can do justice to the era. Eventually the list runs to no less than thirty-seven books, which he then cuts down to a short list of eleven essentials. No wonder Leiber's response was to abandon the historical setting altogether.
In short, I think a good case can be made out for Lovecraft's being indirectly responsible for Leiber's creation of the world of Lankhmar, Nehwon
Just a thought. In any case, it's good to have this earlier version of Leiber's tale, and to see Lovecraft's critique (which, to be fair, is generally positive -- e.g., "The novelette is really very much all right just as it is" [p.166], "The farther I read into 'Adept's Gambit' the more I enjoyed it" [p. 164]). And he's spot-on with his wish "Let us hope that your mental collaboration [with Fischer] will give rise to a long sequence of tales about Fafhrd & the Mouser" [p. 172].
And now, having read this, it's made me want to go back and read the whole series -- not in the internal chronological sequence Leiber established in the late '60s* and thereafter, writing a number of fairly weak bridge stories to get the characters from point A to point B, but in the order in which they were originally written, which I shd be able to find out with a little digging. Sounds like a good off-and-on project over the rest of the year.
*probably on the model of the Lancer paperbacks of Howard's CONAN series, padded out to great length (was it twelve volumes?) by Howard pastiche written by L. Sprague de Camp and Lin Carter. I remember de Camp saying in one of their Forewords that no one could tell which stories were genuine Howard, which were other Howard stories re-written to feature Conan, and which were brand new stories by himself and Carter, when it was painfully obvious to the reader which were which.
N.B: By the way, I did spot one error, but it was (a) relatively minor and (b) among the editorial apparatus, not in Lovecraft's piece: Eddison's THE WORM OUROBOROS was published in 1922, not 1926, as incorrectly stated on page 195 (the latter is the date of the American edition).