To the best of my knowledge - from a spirited but doomed attempt to read Google's privacy policies - Google is committed to deleting your location history after sharing it with 10,000 or so vendor partners.
Each of those vendor partners have pinky promised to comply with the rules outlined in the same privacy policy that I failed to read.
For context, I'm not convinced any living person has read the entirety of Google's privacy policies.
Sadly, I'm quite confident - by the law of averages, human nature, and corporate corruption - that not all 10,000 trusted partners also deletes our location data history.
Google does take privacy preserving steps to anonymyze what it shares.
My educated opinion is that no amount of attempted anonymozation is sufficient for the breadth, scope and quantity of data that Google collects.
Shorter answer for you: yes, I believe that is a corporate lie. True only in technicality, but likely false by any reasonable persons expectation of what "delete" means.
Not to defend Google because they violate privacy in many ways, but they absolutely do not share that level of data with partners. This is not some ethical decision. The data is just far too valuable to Google. Google is extracting as much value as they can from users, advertisers, and publishers, and if they sold access to the data itself, publishers and advertisers could begin cutting out Google. Instead Google gives advertisers a lot of control over what users to target, and uses the data inside a black box to show those ads.
Google is hoarding your data and using it to show you ads with minimal built-in opt-outs. But they aren't sell your data.
Google is only one of a advertising and tech conglomerate, Alphabet Inc, which is the owner of Google and a lot of other companies which use your data for their and related advertisings. They control almost everything in the web.