There's a difference between lying and being wrong. To lie you need to need to misrepresent something you (think you) know. If Pinocchio's nose would grow whenever he was merely wrong he could solve any yes/no question by just reading it out loud: mathematics, health, crime, even know the future. I doubt that's what the author of Pinocchio intended. In this case Pinocchio isn't lying, he's just wrong, the nose doesn't grow.
It would in fact grow, as at the end of the movie, the viewers were left with Pinocchio being a real boy, and, as humans, our ears and noses never actually stop growing.
YAY PONOCCHIO!!!