It is truth.
I have done this. The first time I saw this done , it was an oil guy frome Traverse City, he worked for the Mc Clure oil company, and he called it "Witching a line", and it works just as described above in finding an oil pipeline which was underground 3ft or so, and is apprx. 8 in, in diameter.
When you walk with the two metal rods that you have bent,(you are holding the short ends 4-7 in, and the long ends 10-14 in.) straight out in front of you around 9-12 in. apart(pointing away from you) and when you cross the pipe, the two rods criss-cross.