It is not correct.
The M-Key feature is only a "signal" to excite the M-Unit. It is akin to moving the stock key switch from OFF to ON, sending power from RED to BLACK which is normally also run to the LOCK port. With the Keyless feature, the MotoGadget BROWN wire from the M Key is run to LOCK.
With the M-Unit "Blue" it now receives that excitation from your BT device. That excites the M-Unit to energize. Now, the Reg/Rec still needs a switched 12v reference to manage the charging system. You can run the Regulator BLACK to AUX1 or AUX2 as both of these are enabled with energizing the M-Unit.
You should compare the resting battery voltage with a meter by directly taking a voltage reading at the terminals. Then, energize the M-Unit, and read both AUX ports with the meter (red probe to screw, black probe to ground). The voltage should be VERY close. For the most accurate readings, unplug all other output ports so you are only reading the switched 12v output of the M-Unit.
The Regulator BLACK will constantly monitor the AUX output and use that as a reference to the dynamic charge condition of the battery, managing the stator's output for battery replenishment.
Easy enough.
By the way, whomever told you that, keep your distance; they're an idiot.
