Well, to be charitable, WGA is an appalling intentionally-user-hostile mess that MS keep very much underdocumented, so it is reasonable to believe that this is what WGA does without being a liar. One could simply be mistaken.
(Certainly when WGA fires, it does make it *appear* that you have to reinstall the OS, because it demands that you pay MS a sum of money equivalent to a new OS install. But, no, they don't give you a new OS for that. You pay piles of cash and get a key back instead, which makes your OS work again -- until you have the temerity to change too much hardware at once; the scoring system used to determine which hardware is 'too much' is documented, but not by Microsoft.)