Yes, that is true. On a newer cocker with the larger valve chamber and valve designed and sprung to run on lower pressure you can't run unregged CO2. The higher pressure will keep the valve held closed too much, and you won't be able to achieve decent velocity no matter how much you turn the adjuster in.
The problem can be remedied either by regulating the pressure down (which pretty much kills the idea of running a vertical 3.5oz) or by putting in an older (pre 2k) valve and springs. I haven't experimented with putting a devolumizer in the chamber, but that may also help if you're stuck using the newer LP valve.