What's wrong with that statement? FEM is a good way to handle deformables, but it isn't the only way, so it a fine statement.

It's used as a claim of physical accuracy, but it's not related to that.

Sorry if I'm misunderstanding, but isn't FEM used in physics engines because it is an good approximation for the underlying physics? For example, I believe the Drake Physics engine uses FEM to model deformable materials relating to vehicle crashes at Toyota

FEM is just a numerical technique for solving some kinds of differential equations. It doesn't aitomatically make you accurate or not, just like any other stable solver.