i do not believe that this is true. as a european citizen i have the right to live anywhere in the EU regardless if i even have a job or not. so the location of my employer should be irrelevant.

can anyone find actual laws to the contrary and evidence that they do not violate EU-law? a quick search by myself turned up nothing.

cross-border employment has been common for decades, so such a limitation would be very surprising.

what is possible is that employers may shy away from the resulting complexity because the employee needs to pay taxes in his country of residence, and not that of the employer.