You're ignoring material waste. This process doesn't consume 100% of the tree; only a portion of the tree's carbon is sequestered into the building. The rest is rotting.
> The space the trees were in will now have more trees grown in them.
Trees are renewable, but it's not quite "copy&paste". Further, the harvesting of the trees was certain to be carbon intensive.
So, on the whole, you can trust this process IS NOT CARBON NEGATIVE.
What it may be is LESS CARBON INTENSIVE than a traditional process. They are VERY FAR from crossing the neutral line and yet are trying to claim carbon negative? That's pretty brash.
Does the objection make more sense now?