No, it's not true. I make H.264 Bluray's and MPEG-2 DVD's all the time with tons of chapters that do show up in Encore. Two important things that I learned:
1) You need to give your Encore Chapter Markers a name (even if it's just "1", "2", "3", etc. Something. Without a name, the don't appear in Encore.
2) Keep the .xmp and .xmpses files (which automoatically are generated with the exported video/audio files, in the same folder as the exported audio/video files. I once took them out and away went my chapters in Encore.
It appears that you are not using ADL (Adobe Dynamic Link), to get your PrPro Timeline into Encore. Is that correct?
If it is, I would suggest using ADL to Encore, so that the Encore Chapter Markers do carry over.
If one does a straight Export from PrPro, even to a BD-compliant file, the Encore Markers will not transfer.
... and author the DVD.
....my Blu-Ray DVD in Encore.
DVD or Bluray? You can't put Bluray on DVD. As the other responses, let's assume Bluray.
In my quick test (CS6), both H264-Bluray and MPEG2-Bluray carry Encore markers from Premiere whether they are named or not. But naming is a good idea for most projects, and there are some formats that do not carry them without naming.
You do not have to dynamic link to get Encore markers from Premiere as long as you pick the right format and follow DMH's advice re sidecar files (xmpses etc).