untrue
What you've really heard (or what the people mis-interpreted you heard this from) is SOME people, very, very, very, very few, have a reaction to finasteride and start to produce extra estrogen. Almost everyone on this board is on finasteride yet only a few have had any estrogen-related sides. Usually your nipples will get a little puffy or sore, so you'll notice that, get off finasteride, and things return to normal.
The bodyfat thing is from people who have gyno--often they have more estrogen and their natural bodyfat raises (like a woman, even if she's skinny, has a higher bodyfat percentage than you'd think, largely due to higher estrogen and a few other factors). This isn't always true, its just a possible sideeffect of people with gyno.
Of course, that's no reason to not get in shape and keep your bodyfat percentage down. If finasteride helps anyone it will hopefully be even better to a healthier, in-shape person.