Chris,
I'm going to be really honest here, so don't take this as me trying to be anything but helpful. Whoever responded to the 1 star review you mentioned lost some credibility in the first sentence.
The response starts off with, "Dear Roy, I think we need to correct some facts here." Combating abusive with abusive is a good way to turn the mass against you. Always remind your client before they respond that facts may be misstated by the customer. It happens; we're all human.
From an outsiders point of view, I would agree with Google by not touching this review. I think the response actually makes it worse. In no point of the review does he mention any specifics about the appointment (beyond the leg vs back issue), but the response called out some... behavior they remember seeing from the client. This was not substantiated in the initial review.
If I put myself in Roy's shoes, I would be mad. If he notices the review response, then he could feel embarrassed. When someone gets embarrassed online, they tend to over-correct in their responses. Be on the lookout for more negative reviews from this person, which is possible.
The review response looked like it was trying to blast his reputation, not correct the problem. I think the review response hurts more than the review (personal opinion).
yelp has a great article on what to do with reviews -
https://biz.yelp.com/support/responding_to_reviews - not surprising, since they're 2nd when we tend to think of where to get reviews for a business.
Joy's responses to negative reviews are fantastic. Using them for this situation, the response could have looked more like:
"I am very sorry about your experience. We pride ourselves on providing exceptional service to each and every client. I have reviewed your appointment with our massage therapist, and we are both very sorry we couldn't meet your expectations.
Unfortunately, as you mentioned we do not let walk-in clients pick the therapist. That is because we schedule bookings days and sometimes weeks in advance. It would be unfair to a customer who has already scheduled with their trusted therapist.
Please call me right away at (insert phone #) direct extension (enter extension) and I will personally ensure you get connected with a therapist to discuss your leg issue. I want to extend my apology for the misunderstanding, and hope you will give us another try. Thank you. (owner name)"
Once again, realize I'm trying to share a subjective opinion on this case. You say he insulted the staff, which could be possible. Unfortunately I can't tell that from the review. All I know is what he wrote. Bringing those facts in have a 50/50 chance of helping or hurting the business. To me, they hurt the business. It makes me wonder if I should be honest with them or if they will blast my review, and undermine my credibility.
Responding to negative reviews sucks. There's nothing fun about it. The ultimate goal should always be to try and either A) Get them back in the door to try the business again & adjust the review or B) Show how caring and understanding the business actually is.
T
alk with the business owner about all their reviews/responses. Play devils advocate to show different ways people could interpret the review/responses. If they can't take a neutral stance when responding, then they need to have someone else respond to the reviews. Keep insults and criminal matters away from public view, and don't bring it up unless the customer mentions them first. 
