Clarification with Kuhn-Munkres/Hungarian Algorithm
You are right that $G_{l'}$ is not necessarily a superset of $G_l$. However, you can still prove that the algorithm runs in strongly polynomial time. You have the following invariants:


all edges in $M$ remain edges of $G_{l'}$
we don't remove vertices from $S$ and $T$ until we increase the size of the matching $M$, at which point $S$ and $T$ are reset (step 1); so the size of $S$ and $T$ is monotonically increasing until the size of $M$ is increased by 1
after updating the labels to $l'$, the size of $T$ is increased by at least 1 in the next step


What can you conclude from this? The size of the matching $M$ never decreases. At each iteration we either increase the size of $T$, or we update the labels, which will cause us to increase the size of $T$ in the next iteration. So after $2n$ iterations, the size of $T$ will be $n$. Since $T$ cannot grow anymore, we will have to increase the size of $M$. But the size of $M$ is at most $n$, so the algorithm will finish after at most $O(n^2)$ iterations. An iteration can be executed in time $O(m)$, so the total running time is bounded by $O(n^2m)$. 

BTW the sets $S$ and $T$ are a bit mysterious in this description of the algorithm. Here is how we usually think about them. Orient all edges in $G_l$ as follows: the edges in $M$ go from $Y$ to $X$ and all other edges go from $X$ to $Y$. Then $x$ is an unmatched vertex, $T$ is computed to be the set of vertices in $Y$ reachable from $x$ by a directed path, and $S$ is the set of vertices in $X$ reachable from $x$ by a directed path. If $T$ contains an unmatched vertex, we have found an odd-length alternating path, and we can augment the matching (increase its size by reversing the direction of the edges along the path). Otherwise, we can change $l$ so that the size of $T$ increases.