“A more important reason is that the bands will intuitively trust someone they think is a peer, and who speaks fondly of the same formative rock and roll experiences.”
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Doubt the conventional wisdom unless you can verify it with reason and experiment.
The woman I am currently crazy about was a vegetarian for a year until I started dating her. As is the case with most vegetarians, she had never eaten properly prepared meat, only commercially packaged or otherwise abused flesh.
Find people who think like you and stick with them. Make only music you are passionate about. Work only with people you like and trust. Don't sign anything.
If the label presents them with a contract that the band don't want to sign, all the label has to do is wait. There are a hundred other bands willing to sign the exact same contract, so the label is in a position of strength.