I wouldn't doubt that there are sites that say that. You don't even have to look hard to find warnings against everything there is, including dirt, grass, water, air, etc not to mention deodorant, bras, and every kind of food known to man. That said, they have to glue it with something and being surrounded by it in a small room may not be good and am curious why someone would put that in there instead of drywall, which I think would be cheaper. I'm not sure about "signing your own death certificate" though. And I don't know what is in Kilz but that stuff smells way more toxic than chipboard/oxboard. Or why it would have to be sprayed-I guess because they figure you can't spray it yourself and would have to pay someone (them?) to do it.
Almost all carpet contains formaldehyde so if you want to avoid that, go with laminate or something. Or paint the concrete.