Bad for the store you mean? Because the customer doesn’t convert (buy) something if it says “hurry only 1 left in stock” because everyone knows that store inventory is inaccurate and they ultimately don’t have 1 in stock, they have 0 in stock?

The way I interpret the comment, it says this:

A. [explicit claim; humorous] Analytics confirm that, if you show people whether products are in stock locally, they won't buy those products on your website.

B. [by implication] This is bad, because it "lowers" your sales. So you can't display this information.

C. [by implication] The retailers are making a mistake - the reason people don't buy products on the website when availability information is displayed is that they go to the store and buy the product there.

D. [summing up] If you measure something you don't care about, you will end up doing things that make you look like an idiot.

close enough

That's not a good explanation. Either GGP was being sarcastic or is corpo-brained. GP was confused because, unfortunately, both are equally likely these days.

Interesting. Do you have sources to read more about it?

Is it good for conversion when I give up out of frustration at your broken store and decide to just get the thing on Amazon instead?

This isn't just hypothetical: for a while I was using QFC (Kroger) for grocery pickup, but after one too many instances of adding an item to my cart and then only finding out at checkout that a third of my items weren't actually available, I said to hell with it and switched to doing all that at Whole Foods instead, since their inventory counts are actually correct.