The 1837 edition changed prophesying to prophesy because the sequence of two participles ending in -ing seemed unacceptable. Although the change was not marked by Joseph Smith in his editing of 𝓟, it nonetheless appears to be intentional. The earliest extant reading (found in the printer’s manuscript) could well be an error for either “prophesy saying” or “prophesying say”. The doubling of the ending -ing would, in either case, be due to the proximity of the other participial form.
Of these two possible emendations, the one that retains saying is more consistent with other examples in the text:
For these four examples (as well as the one in Mosiah 12:2), we have a direct quote after saying. Moreover, the Alma 8:29 example uses the imperative in “go forth and prophesy”, much like the current text in Mosiah 12:2 (“stretch forth thy hand and prophesy”). This similarity implies that the 1837 emendation to Mosiah 12:2 probably restored the original reading.
There is also evidence that the scribes in 𝓟 sometimes accidentally wrote the present participle in place of a finite verb form, although in only one case was Oliver Cowdery himself responsible for making such an error:
In Mosiah 12:2, it appears that the immediately following saying prompted one of the scribes (either the scribe for 𝓞 or Oliver Cowdery as he copied from 𝓞 into 𝓟) to accidentally replace prophesy with prophesying.
Summary: Retain the 1837 emendation of “prophesying saying” to “prophesy saying” in Mosiah 12:2; the earliest extant reading, with its sequence of two present participial forms, appears to be an error that entered the text early on in its transmission.