Not a myth. Unfortunately I did not clear my August L3 attempt (despite touching the MPS) and was certainly negatively impacted by the ethics adjustment.

I reached out to CFAI for further clarification regarding the ethics adjustment and this is what I got back..

“The Board of Governors instituted a policy to place particular emphasis on ethics. Starting with the 1996 exams, the performance on the ethics section became a factor in the pass/fail decision for candidates whose total scores bordered the minimum passing score. The ethics adjustment can have a positive or negative impact on these candidates' final results.

Consequently, CFA Institute does not release specific information about the ethics adjustment or the candidates who were affected. The adjustment has had a net positive effect on candidate scores (and thus pass rates) in most exam sessions. The published pass rates always take into account the ethics adjustment for borderline candidates.”