I've heard that too: in the event of an accident, it's better to relax all muscles than to tense them up (particularly, I've heard this about whiplash). Why is that?
I'm not really sure why it helps, but I can certainly say it does. I know that when I panic and go stiff it hurts more as my tense body hits the rock. Even when in a similar mental state, hitting the rock with a relaxed body is less painful.