That for every 35 lbs of fat you lose, your penis erection gains an inch? Granted of course, i'm not 700lbs and lose 500 lbs for 11+inches
Is it true?
Yes and no..
No...Your penis does NOT gain ANY length.
Yes, you lose FAT from your pubic area which will expose MORE of your given length.
no.. the only difference would be like if u were peter griffin and had to lift the fat from covering your dick then after losing wait slowly the fat would start to move back thus "gaining" size.
sdp has put it well. I think the figures you quoted are an exaggeration, but there will be more apparent length as less of your penis will be buried in the pubic fat pad.