I'm not aware of that personally, but I believe it. The revisionist history trying to paint Zuckerberg as being manipulated here is so just insulting to reality. Zuck deserves the credit for both driving the decisions between both the successes and the failures that arose here.
She mentioned it in a performance session that was recorded before I joined FB (I joined in 2013, I believe the talk was from 2011).
I completely agreed with her, but after watching the talk came to the conclusion that if she couldn't change it, then I certainly wouldn't.
More generally, younger people tend to be OK with everyone knowing everything, while as you get older you want to share with smaller circles to avoid conflict. Sheryl was quite a bit older than Mark and Chris at the time, which may have been the difference.