why lie?

tell as it is. they're testing your willingness to work for them. you test them: how will they value you

His first mistake was accepting the initial invite. He should have specified that he wasn't available that day and asked to do it another. He didn't though, so either got to lie and say that something new has come up which can't be avoided, or tell the truth and explain that he double booked himself, which might make him look a little silly.

Why is this bad advice?

because lying will get you no where except in a very deep hole with no means of escape?

I don't see how that can be true. It's perfectly possible to benefit from lying.