I have been to Highgate Station several times. I'm wondering
what you're seeing that I'm not.

If one stands at the Priory Gardens entrance, the dilapidated
remnants of the original station are clearly visible. Access to
the Northern Line involves walking under them. Any plan
London Underground might have had to take over the branch
to Ally Pally would not have incorporated using the original
station. It would have involved branching off from their own
Underground station and joining the original track where it runs
alongside Highgate Wood. (Still today in Highgate Wood there is
a demarcation fence separating the wood from the railway land)