Well Mike, that's not the only "well known fact" in bow making that I've found to be something else, so call it that if you wish, but calling it a fact doesn't make it one.
If we're going to have a fair conversation about this, a few things should be noted.
Toothing plane blades are made in a variety of teeth per inch. So yes, the most coarse ones would show their effects at the fadeouts of their joinery. They could be made perfectly smooth, but would be visible unless they were dyed or otherwise hidden. BUT, the irons with more teeth per inch leave glue lines that can be invisible if the pieces are well mated. I made the danged things so know right where they should be, and sometimes I can't find those glue joints myself. Same with horn tips, overlays, underlays, and such. Ugly blend? No. There are NO ugly blends on my bows and I wouldn't use them if that was the case.
By the way, someone mentioned draw weight... I've made bows like this with draw weights over 70 pounds... no pedastals, no powerlams, flexing well into the added handle pieces... glue lines still as tight, tidy, and hard to discern as the day I made em. Just sayin'.
Smooth On is made to flex and maintain the bond. It holds flexing limbs together just fine, right? In fact, I have used the toothing plane on countless, flexing full limb joints without a single failure. So it obviously isn't "the flexing" of an added handle piece that causes the joint to fail. Imo, most commonly, poorly designed or executed transitions from handle to working limbs are the cause... which is to say, halting the flex from the limb too abruptly. So it may be more accurate to say then that a non-flexing handle is the cause, not a flexing handle. Toss in another issue like a joint a bit starved of glue, or not enough working limb or limb taper, etc, and off she comes. The use of a toothing plane to prep the joints simply helps swing the odds back in our favor a bit by creating more gluing surface and making it practically impossible to starve the joint by clamping. Not a cure all, but a big help. If we add to that a good design and a smooth transition, the handle piece can flex and stay tight... and that's a fact.