Unfortunately, this is true. I was an undergrad at Berkeley (now I volunteer in a lab there), and I have a pretty compelling personal story (have a genetic illness, got very sick, managed to get a 3.74 GPA even though I was in and out of the hospital all the time, finally stabilized and work in a lab now, dream is to study the illness I suffer from) and my lab mentor told me I should hide my illness because grad schools wouldn't want to take a chance on me.