Does the dipole moment increase or decrease by increasing the bond length?
Strictly speaking, you can neither decrease nor increase the bond length a slightest bit.$\dagger$ All molecules of a given compound are equal. It is not like you may grab one with tiny pincers of some sort, stretch it a little and see what happens.

You may, however, consider a molecule of a different compound; indeed, that's what you do in your question. But that's not just a different bond length; it is different atoms with different properties, and hence different everything.

Most importantly for the question at hand, iodine has much lower electronegativity than fluorine, so the effective charges on $\rm H$ and $\rm I$ in $\ce{HI}$ will be much lower than those on $\rm H$ and $\rm F$ in $\ce{HF}$. It just turns out that the increase in bond length can't compensate for this effect, hence the lower dipole moment.


$\dagger$ For those who might want to point out possible vibrational excitation or some other subtle (or not-so-subtle) effect: don't. Let's keep it simple.