It's true. You will burn plenty of fat that way. You will also decrease muscle mass considerably.
Doing cardio on an empty stomach, after an eight-hour fast, glycogen stores depleted, your body will use anything and everything for energy, including muscle.
IMO, a certain amount of AM cardio is fine if you're considerably overweight. But if you're bodyfat is relatively low (even 18% is considered low by normal standards), you'll likely sacrifice more muscle than is acceptable.