I'm with Art on this one. Urban legend, and one of several inaccuracies in the Elapsed Time article (still, overall a good article and eight pages of model in a mainstream car mag is great!)
I did box art models, hobby show samples, and models for Sales Staff meetings for AMT over this same period (perhaps starting a little later than Art did), and as he said, I recall the decision to go with box art photographhy came from AMT's management and was administered by their Art Department. However, my experience was somewhat different with respect to Bare-Metal (I used it on all of my box art builds), and I was not given any instructions as to specific chassis/engine/suspension colors.
Years ago I contributed an article to the Thomas Voehringer web site recapping the phone call I got after turning in my build of the chopped '53 Stude that was used on the cover of the Salt Flats series kits (circa 1978). They were near apopletic (sp?) over the dechroming of the body and the molding in of the grille blanks, as I recall. My response? "Read your own instruction sheet!" I calmly copied the instruction sheet from the 1964 original release, sent it in the next day, and never heard another word. And the model appeared exactly as I had build it (except for AMT's addition of decals to the body) on the box art.
I overlooked something in my posting: I believe it was Dennis Doty, who did the '51 Chevy Bel Air Convertible box art model, who convinced AMT Corporation to allow Bare Metal Foil. Their resistance earlier stemmed from a complete lack of knowledge and understanding of the stuff (bear in mind that Eldred Mason, founder of BMF in 1970, kept trying to promote the stuff for doing natural metal finishes on scale aircraft, where it continued to find only limited acceptance from modelers, and downright prejudice from IPMS judges. However, once Tom Valmassei and crew in their art department got a good look at a model car trimmed in BMF, they saw quickly how it brought out the details of chrome trim far better than Testors silver paint. I believe the 51 Chevy convertible happened in early 1977, about the time I started doing the "Countdown To The Sixties" series of cars.
I too raised the ire of the art department, in 1980, with the reissue of the 1907 New York to Paris Thomas Flyer by Lesney/AMT. In looking over the kit, it was very apparent that the bright gold-tone plating on the radiator, headlights. taillight, hubcaps and bulb horn would have been very toy-looking in appearance on the model, which depicts the car as it finished the race (The Winnah!!) in Paris, somewhat the worse for wear after nearly 20,000 miles of driving and sea transport. I called the art director at the time (whose name escapes me now), explained the dilemma to him, and he more or less gave me carte blanche to give the model the appropriate weathering.
Having an excellent book of color pics of the cars of Harrah's Automobile Collection, with several shots of the Thomas--I built and painted the car as the pictures show--THEN weathered it lightly, but gave the brass parts a slight tarnish effect with an airbrushed "wash" of extremely thinned out Testors "Rubber", which gave the brass parts a very realistic appearance. Then, in keeping with accuracy, I omitted the left side headlight lens (the real one was broken out somewhere between Berlin and Paris, and angled that headlight slightly downward, just as it appears on the actual car to this day (the only thing I wish I could have added, but AMT didn't include) was the Parisian's bicycle which got hoisted up on the left running board so that its headlight would make the Thomas legal for the streets of Paris, and keep the Gendarmes happy, but Oh Well!.
Anyway, when the model arrived at Lesney/AMT product development in Warren MI, consternation ruled! I got a phone call, with a stern comment that I should not have modified the kit in any way. I pointed out that no modification was made, just a slight adjustment of that headlight, and of course, omitting the left headlight lens. The guy wasn't happy, but agreed to study it more thoroughly. About an hour later, the Managing Director of Lesney AMT (a British chap then commuting from suburban Windsor) called me, and assured me that the model was MORE than acceptable--he being a Matchbox Toys veteran really appreciated that attention to detail and finish. PHEW!
Perhaps my most satisfying project was when I was commissioned to do a conversion of AMT's Kenworth Conventional tractor, to the Alaskan Hauler. Once the kit and pics arrived, a quick phone call to Troy MI netted me a dozen sets of American LaFrance Ladder Chief chrome trees, so I could do the front fenders on that rig from the diamond tread running boards. That, and scratchbuilding the heavy-duty "headache rack" were principal to making it look like what it should, for display at the 1978 HIAA Trade Show (wherever it was that year). I was told later, that the art department went ahead, used my trade show prototype for the catalog and box art pics, but I was never really able to confirm that (too bad digital cameras were 20+ years into the future, huh?).
Another project that was very intriguing, was to do a built "prototype" Gar Wood Packer Body for the AMT Ford C-600 City Delivery box van. For that, I was given the truck, along with a sell sheet from Gar Wood showing 3 views of the packer body, which was a size that really should have had a tandem rear axle. This one was done for the 1978 HIAA show as well. The body was constructed from .040" styrene sheet salvaged from the So-Fro Fabrics store here that my then-wife managed. I did the thing, delivered it in person, never heard anything about it again. In June of 1982, I was at the annual model contest put on by LaGrange Hobby Shop in LaGrange IL (an outdoor contest). Walking across the street to the store, what did I see? That prototype Ford C-600 Garbage Truck that I'd built. I inquired about buying it from them, but they weren't interested in selling. Oh Well!
A couple of times back in the 90's, at GSL, there were a number of box art builds auctioned, which had been donated by AMT/Ertl.