Well they certainly are not being completely truthful because it's a confirmed fact that T3-M4 will a party member so they can't have killed off your entire KOTOR party. I believe Obsidian was pretty clear in saying that there would be cameos. Perhaps the OXM people were talking about what happens if you tell KOTOR II that Revan went darkside because in that case, yes, almost all of your original party is dead because you killed them at the end of KOTOR.