I would say they were 99.99% lying. However, it is most definitely not a full backup of the drive. While Time Machine does back up system directories and files, there exist a number of items that are never backed up (see /System/Library/CoreServices/backupd.bundle/Contents/Resources/StdExclusions.plist). Most of those exclusions are no-brainers - caches and block devices for instance which don't make sense to back up. Certain logs, core dump files, and all of /tmp space are never backed up -- not that anyone would want to recover those. Anyways, a fully working System with all accounts can be fully recovered from a Time Machine back up. But the recovery will not be a full "carbon copy" of the original.