Totally not true. The factory reset just resets the user adjustable settings to factory defaults. The update can only be rolled back using the update program running on a computer.
If you think about it, that would be a pretty bad design because the manual uses the factory reset as a catch-all troubleshooting step to get people back to ground zero so they can see whether the issue is a bad user setting or an actual hardware problem with the machine. I think confusion reigns supreme with imprecise use of terminology, the telephone game, and worst of all, improperly trained and informed customer service reps (not saying that was the case here, because there no facts on the circumstances on how this information was disseminated other than the fact that it was bad info).
On the other hand, it would actually be nice if there was a feature where you could choose to boot the machine into the original or updated software version of your choice without having to run the update program.